Fiscal Q2 (October-December) revenues grew 2% to $8.98 billion. Total segment operating income grew 16% to $1.50 billion. TV and cable were strong contributors, despite the lack of political advertising at the company’s local O&O TV stations.
“The significant growth we reported in the quarter in the Cable Network Programming, Television and Filmed Entertainment segments clearly validates our strategy to develop and distribute superior wide-ranging content. I am particularly pleased with the success of our business strategies in spite of the uncertain economic conditions that we continue to face. News Corporation’s commitment to delivering value to our stockholders is unwavering and we will continue to focus on generating superior shareholder returns, as evidenced by our strong year to date earnings and the successful completion of over half of our previously announced share repurchase program,” said CEO Rupert Murdoch.
Television reported second quarter segment operating income of $189 million, an increase of $38 million or 25% versus the same period a year ago. The growth reflects increased broadcast network advertising revenues, underpinned by the stronger fall schedule led by X-Factor and The New Girl , strong Major League Baseball and National Football League programming, as well as a greater than 100% increase in retransmission consent revenues. These increases were partially offset by lower political advertising revenue at the local television stations and increased programming costs at the broadcast network, primarily related to the new series and additional Major League Baseball World Series games. Excluding political, O&O revenues were essentially flat.
Cable Network Programming reported second quarter segment operating income of $882 million; a $147 million or 20% increase over the second quarter a year ago, driven by a 9% increase in revenue. Operating income contributions from the domestic channels increased 25%, underpinned by improved results at the Regional Sports Networks (“RSNs”), which included an approximate $55 million net timing benefit, principally from reduced rights costs resulting from the NBA lockout, and at Fox News, which marked its 10th consecutive year as the leading cable news network. The Company’s international cable channels grew earnings 8%, led by continued momentum in Latin America at Fox International Channels partially offset by lower contributions from STAR in India.
Affiliate revenue growth of 9% at the domestic cable channels for the second quarter primarily reflects higher rates at the RSNs and the FX Network. In the quarter, the comparative positive impact from the absence of the prior year’s distribution contract renewal dispute was offset by reduced affiliate revenues from this season’s NBA lockout at the RSNs. International cable channels’ affiliate revenues increased 19% over the year-ago quarter, led by growth at the Fox International Channels in Latin America.
Advertising revenue at the domestic cable channels grew 6% in the second quarter of fiscal 2012 over the prior year period led by pricing and ratings growth at the FX Network partially offset by advertising declines at the RSNs related to the NBA lockout. Calendar 2011 marked the FX Network’s most watched year in its history, with an over 20% increase in prime time, Adults 18-49 ratings. The international cable channels’ advertising revenue grew 5% over the prior year, primarily due to improving advertising markets and viewership trends, led by particular strength at Fox International Channels in Latin America. Advertising revenues at STAR India were in-line with the prior year, as strong local currency advertising revenue growth was offset by the impact of the weakening Indian Rupee.