News Corp.'s Cable, Film Businesses Boost Q3 Results
News Corp.'s film and cable units help to give the company a sharp rise in its fiscal third-quarter profits. Net income shot up 47% to $937 million with revenue inching up 2% to $8.4 billion.
Its strongest unit -- cable networks -- witnessed revenue growth of 16% to $2.38 billion, with a 15% gain in affiliate fees and 10% hike in U.S. advertising revenues versus the prior-year quarter. International channels gained 7% in advertising revenue. Operating income climbed 15% to $846 million.
News Corp.'s television unit witnessed a 16% decline in revenues to $1.2 billion, with operating income down 11% to $171 million. The company says the drop was due to the absence of advertising revenues for the broadcast of the Super Bowl, which its Fox network ran in the prior-year quarter. There were also declines in advertising sales due to lower ratings from Fox’s “American Idol.”
Although Fox is still the leading U.S. broadcast network, it has seen steep drops in ratings this season versus a year ago, largely due to lower numbers from its big show “American Idol,” now in its 11th season.
Chase Carey, president/COO of News Corp., in speaking to Wall Street analysts, said: “We need to give that show enough energy to extend it.”
News Corp says advertising revenues at the television stations and broadcast network were about the same versus the prior year. It also reported a doubling of retransmission consent revenues.
Its film unit was up 11% to $1.7 billion, with operating income 10% higher at $272 million.
Higher revenues came from worldwide theatrical and domestic home entertainment performances of “Alvin and the Chipmunks: Chipwrecked” and “The Descendants,” as well as worldwide home entertainment revenues from “Rise of the Planet of the Apes” and revenues from pay television for “Rio.”
Publishing revenues were about the same $2.025 billion versus $2.084 billion. Operating income rose to $130 million from $36 million. It took a $63 million charge for the closing of its U.K. News of the World publication.