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BBC MUNDO RADIO
By JOSEPH PLAMBECK
Published: May 4, 2010
The record-setting success of “Avatar” and widespread gains in the company’s other businesses led the News Corporation to beat Wall Street expectations in the latest quarter.
The company, controlled by Rupert Murdoch, owns a variety of media assets, including the 20th Century Fox film studio, the Fox broadcast network, newspapers and cable channels.
Many of those businesses were helped by an uptick in the advertising market, including Fox News, which reported record profits, and The Wall Street Journal, which had a 25 percent increase in ad revenue from the same period a year ago.
In a conference call with analysts, an upbeat Mr. Murdoch described the company’s results as “really exceptional,” saying he felt good “not just about this quarter, but about the rest of the year.”
Over all, the News Corporation reported revenue of $8.8 billion in its fiscal third quarter, ended March 31, up 19 percent from the same period a year earlier.
The company reported net income of $839 million, or 32 cents a share. Analysts had expected the company to earn 22 cents a share and generate $8.2 billion in revenue, according to Thomson Reuters.
A year ago, the company reported net income of $2.7 billion, $2.4 billion of which included the partial sale of a stake in the NDS Group and a noncash tax benefit.
The company reported increased profits in all of its major units. Fox News Channel increased its operating income 31 percent from a year ago, largely from improved advertising revenue and higher fees paid by cable providers for the channel.
Other cable channels owned by the company had a 42 percent increase in profit. Operating profit for the whole cable unit increased to $588 million from $426 million.
The company’s television unit, which includes Fox Broadcasting, had $40 million in operating profit, up from $9 million a year earlier.
Newspapers owned by the company benefited from increased advertising revenue and cost cuts. In the quarter, its newspapers reported operating profits of $131 million, up from $29 million. The company does not always break out the performance of specific newspapers, as it did with the advertising improvements at The Journal this quarter.
“In the ad market, we are seeing strong across-the-board growth,” Mr. Murdoch said, which “bodes well for many of our core businesses.”
But it was “Avatar,” which has earned more than $2.7 billion worldwide, that really helped the bottom line.
The movie unit had operating profit of $497 million, up from $282 million a year earlier. Some of the movie’s revenue was included in the previous quarter.
The News Corporation earnings provide another indication that the largest media companies are recovering after a sharp downtown. Last week, Viacom reported a 37 percent gain in its first-quarter profit. Not all of the news is rosy, though. On Tuesday, Thomson Reuters, the news and information provider, reported a 33 percent drop in profit and its revenue remained flat.
Mr. Murdoch cautioned that the film unit’s next quarter would not be able to keep up the pace, even given the brisk sales of “Avatar” DVDs.
“We have a great slate of films coming up,” he said, “but we don’t have an ‘Avatar’ in there.”
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