NEW YORK, Nov 5 — News Corp reported a higher-than-expected quarterly profit as gains at its Fox cable network and film divisions, plus cost cuts, helped offset declines at its television stations and newspapers.
Chief Executive Rupert Murdoch said he expected 2010 to be a year of stability and the company forecast its fiscal full- year operating income would grow in the high single to low double-digit percentage range.
The international media conglomerate, whose shares rose almost 3 per cent after the news, said on Wednesday that its fiscal first-quarter net income was US$571 million (RM1.9 billion), or 22 cents a share, compared with US$515 million, or 20 cents a share last year. Last year’s net income included a write-down.
Analysts, on average, were expecting earnings per share of 18 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 4.1 per cent to US$7.20 billion, beating analysts’ average estimate of US$7.16 billion. Operating income rose 9.3 per cent to US$1.04 billion.
“Both the top line and bottom line were ahead of what we were looking for,” said RBC analyst David Bank. “As the macro (economy) winds its way back to health, the ability to operate with expense discipline is a huge positive.”
News Corp’s results echo those of Time Warner Inc and Viacom Inc, which also reported signs of recovery in their movie studios and cable networks.
News Corp’s cable programming unit recorded 41 per cent growth in operating income, with better performance from its Fox News Channel.
The company’s movie operations posted a 56 per cent gain in operating income. The unit scored a hit with the international release of the film, “Ice Age: Dawn of the Dinosaurs.” RBC’s Bank said the movie was one of the most successful international box office hits ever.
The results come as News Corp tries to stem advertising revenue declines at its newspapers and local US TV stations.
News Corp’s newspaper unit posted an 81 per cent decline in operating income as people gave up their print editions and went online. Advertising sales have fallen as a result. Local TV operating income fell 54 per cent.
US media companies have been pleasing their investors by cutting costs to beat Wall Street profit expectations.
News Corp shares rose to US$11.90 after hours after closing up 1.05 per cent at US$11.56 in the regular session. — Reuters
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