News Corp.'s lower TV advertising results follow many other TV programmers' lower financial reports; the culprit is weak advertising sales.
Overall, News Corp.'s fiscal fourth-quarter 2008 profit gained a big 27% to $1.1 billion, mostly because of strong results from its film studios and cable TV networks, as well as from the sale of its interests in Fox Sports Bay Area and Gemstar-TV Guide International.
Film entertainment earnings climbed to $220 million, up from $106 million in the previous period from home entertainment revenues from releases "Alvin and the Chipmunks," "Juno," "AVP: Requiem" and "27 Dresses."
Cable operating income rose to $313 million from $284 million--all from better results from the Fox News Channel, the Regional Sports Networks (RSNs) and the Fox International Channels. The company said this was offset by first-year losses from Fox Business Network and Big Ten Network launches.
Despite gains by its cable news competition, the company noted that Fox News Channel viewership was 59% higher than its nearest competitor in prime time and nearly 54% higher on a 24-hour basis.
Most of the channel's better operating income growth--14% in the fourth quarter and 35% for the full year--came from increased affiliate rates.
News Corp. overall revenue was up 17% to $8.59 billion, which is exactly where analysts estimated the company's revenues would land.
Good results aside, News Corp. chairman Rupert Murdoch said in a statement that the company faces "more challenging macro-economic conditions" in fiscal 2009. All that will yield somewhat less growth than recent results.
Like other media companies, News Corp. shares have fallen. But its 32% is somewhat worse than other big media giants. Investors have been concerned that Murdoch will make good his promise to invest more in the troubled newspaper business. This past year, News Corp. bought Wall Street Journal publisher Dow Jones for $5.6 billion.
News Corp. stock rose almost 5% in midday trading to $14.74 a share.