Fox Broadcasting and Fox cable networks helped News Corp. report an increase in revenues, despite a drop in earnings, for the quarter ended Sept. 30.
News Corp. on Wednesday reported net income of $732 million, or 23 cents per share, for its fiscal first quarter, down from $843 million, or 27 cents per share, for the comparable quarter in 2006. The sources of the losses included the year-old MyNetworkTV, the Fox-owned television stations and Fox Broadcasting Network.
Revenue for the quarter was $7.07 billion, compared with $5.91 billion the year before.
The News Corp. report said cable network programming posted operating income of $289 million, an increase of $40 million from the year-ago quarter. The 16% growth reflects increased contributions from Fox News Channel, the regional sports networks and the Fox international channels; however, that growth was partially offset by launch costs associated with the Fox Business Network and the Big Ten Network as well as a lower contribution from FX.
The Fox News Channel more than doubled its operating income compared with the first quarter a year ago, primarily from increased affiliate revenues on higher rates and advertising revenue growth from higher volume and pricing.
News Corp.’s television businesses reported operating income of $183 million, a decline of $9 million from the same period a year ago, as improved results from the Fox Broadcasting Co. and Star were offset by lower contributions from the Fox Television Stations and a full quarter of losses at MyNetworkTV, launched in September 2006.
At Fox Broadcasting Co., first-quarter operating results improved from a year ago as increased pricing drove higher advertising revenues and the timing of the fall launch lowered programming and promotional costs.
Lower political advertising and ad revenues from MyNetworkTV were cited as the chief reasons Fox Television Stations’ operating income declined 9% from the same period a year ago, despite improvements in Fox’s prime-time network and local news.
“The strength of our financial results during the first quarter is yet another illustration of our ability to deliver sustained growth while concurrently investing in tomorrow’s profit generators,” News Corp. Chairman Rupert Murdoch said. “The 19% revenue growth and 23% operating income growth in the quarter was achieved despite spending to expand our cable portfolio both domestically and internationally; despite continued investment in broadening our Internet offerings; and despite additional costs associated with upgrading the color capacity at our newspaper group.
“We expect the development of these assets to drive future growth much as our investments in the Fox News Channel and Sky Italia have translated into strong profit growth today,” he added. “The financial momentum at these businesses, along with the success of our theatrical slate in the quarter, has given us a great start to fiscal 2008 and we look forward to building upon the record results we delivered during fiscal 2007.”
News Corp.’s purchase of Dow Jones & Co. for more than $5 billion still is expected to close before the end of this year.