Despite lower double-digit ratings in the fall, Fox grabbed big double-digit percentage increases in national TV advertising sales from some key programming areas this past fourth quarter -- all part of News Corp.'s strong quarterly earnings improvement for its television businesses.
Overall, second-quarter earnings for News Corp. almost doubled during the period to $675 million, from $284 million in the second quarter of 2009. But much of this was because of a $500 million gain from a litigation settlement involving the company's integrated-marketing services business.
Taking this out, Rupert Murdoch's News Corp. says operating profit would have only climbed 6% over a year before -- primarily from its cable network programming divisions and Fox Broadcasting.
News Corp. cable television was the big mover.
Operating income climbed 22% to $735 million, with advertising revenue at its domestic channels gaining 12%. The company's international cable channels grew earnings 37%, with advertising revenue climbing 27%. News Corp. says this was despite an "adverse impact of a distribution contract renewal dispute at the domestic cable channels."
Fox television had a surge in operating income -- $151 million versus $29 million in the second quarter of 2009. The Fox stations climbed 20% in revenue.
In one particular instance, the Fox broadcasting network rose 24% in advertising revenue from National Football League games and general entertainment programming. But there were lower advertising revenue results from Major League Baseball, due to lower post-season ratings and one less game than the prior year.
As expected, News Corp. took a big hit in its Fox Filmed Entertainment division due to comparisons in the second quarter of 2009, when "Avatar" was factored into the results. The movie went on to become the highest-grossing box-office movie of all time. All this pushed down Filmed Entertainment's operating income to $189 million from $324 million in the second quarter 2009.
News Corp. publishing division got the benefit of that massive $500 million lawsuit. Publishing posted operating income of $380 million -- a $470 million improvement over the $90 million operating loss reported a year ago.
Taking that out operating income, the division dropped $30 million from last year's second quarter. While there was an increase in ad revenues in all three of News Corp.'s major newspaper markets, there were lower contributions at HarperCollins and the absence of $17 million in earnings contributions from the Dow Jones Index business, which was sold in March 2010.
Struggling results continued at the Digital Media Group and MySpace in particular. There was an operating loss of $156 million -- $31 million greater than the prior year. This came from lower search and advertising revenues at MySpace. On the positive list, Fox Mobile had better results. News Corp. satellite TV business cut its losses to $12 million from $30 million in the comparable period.
Overall, revenues at News Corp. inched up to $8.76 billion from $8.64 million.