The Television segment at News Corporation reported fiscal Q2 (October-December) operating income of $29 million, compared to an operating loss of $2 million reported the same period a year earlier. The company said the improved results reflect increased contributions from the Fox Television Stations and reduced losses at MyNetworkTV, which were partially offset by lower contributions from Fox Broadcasting Company.
For the entire company, operating income from the various segments totaled $1.2 billion (excluding a $500 million legal settlement), up from $839 million a year earlier. Excluding one-time items, earnings per share were 25 cents, up from 15 cents a year earlier.
Total revenues for the quarter totaled $8.7 billion, up 10%. News Corp. reported growth at its Filmed Entertainment, Television, Cable Network Programming, Newspapers/Information Services and Book Publishing segments, partially offse tby declines in the Direct Broadcast Satellite Television and “other” segments.
“Our strong top-line revenue growth demonstrates that News Corporation is emerging from this recession with renewed vigor and strength. Moreover, our underlying operating trends this quarter far outpace those of the same quarter last year. We continue to reap the benefits from the restructuring and cost containment measures we instituted before the downturn began and I am pleased that our unrelenting focus has translated to growth across our businesses that will reward stockholders for years to come,” said CEO Rupert Murdoch.
“News Corporation’s leadership position in news, sports and entertainment stems from our unique ability to produce the high quality content that consumers and distributors demand. We have a strong management team that knows how to nurture our core businesses, while taking prudent, creative risks like Avatar that lead the industry forward. I have every confidence that News Corporation is entering a new period of sustained growth,” Murdoch declared.
The Fox Television Stations saw operating income rise 19%, which was credited to improving local advertising trends. Revenues for the O&O stations grew 6% – ending six consecutive quarters of year-over-year declines. CFO Dave DeVoe noted that sales improved each month of the quarter. And Murdoch noted that TV station revenues are pacing up 18-19% in the current quarter.
Cable Network Programming operating income grew 35% to $604 million. Fox News Channel achieved its highest ever quarterly profit and grew its operating income 51%, primarily from increased fees from MSOs. Operating profits for the other cable networks grew 28%.
Given the recent improvement in ad markets and the success of the movie “Avatar,” News Corporation has increased its operating profit guidance for the current fiscal year. DeVoe said the former guidance of an increase in the high single to low double digits has been increased to an increase in the low 20% range.
Taking note of new technology gadgets coming onto the market – most recently the Apple iPad – Murdoch had this to say: “Content is not just king – it is the emperor of all things electronic. We are on the cusp of a digital dynasty in which our company and our shareholders will profit greatly. Devices and platforms are proliferating, but this clever technology is merely an empty vessel without any great content.”