• by Wayne Friedman , May 10, 2007

In the midst of its battle for Dow Jones & Co., News Corp.'s fiscal third-quarter earnings rose a modest 6.2% from movies and cable network improvements to $871 million.

Operating income for News Corp.'s movie division rocketed 82% to a record $410 million on 30% higher revenue. Its big draw--"Night at the Museum"--took $250 million at the U.S. box office take, and strong DVD sales from "Borat," "The Devil Wears Prada" and "Ice Age: The Meltdown" also helped move the needle.

Cable network revenue climbed 19%, with operating income up 34% from News Corp.'s core of networks: the Fox News Channel, FX and its U.S. and international sports channels. Most of this gain came from improved affiliate revenues.

However, the situation was mixed over at its broadcast TV networks.

Television earnings sank 4.5% on 16% higher revenues. While Fox Broadcasting posted 49% operating income gain--mostly from higher advertising prices--it could not overcome continued weakness by its first-year new broadcast channel, MyNetworkTV. The TV group also had higher programming costs during the period from perennial hits "American Idol," "24" and "House."

News Corp.'s newspaper business stayed more or less the same with operating income at $156 million, against a $153 million take in 2006.

The company's direct broadcast satellite business showed higher gains to $91 million in operating income--up from $69 million of year ago, as a result of gains made from its SKY Italia division. Earnings from the company's investment in DirecTV Group, which in a stock transaction has now effectively been sold to Liberty Media, posted $106 million--a 74% gain over a year ago, when it pulled in $61 million.

As for News Corp.'s bid for Dow Jones, News Corp. chairman Rupert Murdoch said the company's $60-a-share offer was "a full and more than fair price." Recently, the bid has seen opposition from members of the Bancroft family, former Dow Jones executives and The Wall Street Journal's editorial staff.