While News Corporation was making headlines for the phone hacking scandal in the UK, its operating units were busy posting strong revenue and earnings growth. Both the cable networks and television businesses were strong contributors to growth in fiscal Q1 (July-September).
“The exceptional strength of our financial results during the first quarter across the majority of our segments is confirmation that News Corporation’s core operations are strong and that we are on course to achieve our strategic and financial objectives,” said CEO Rupert Murdoch (pictured). “While we continue to remain mindful of the persistent economic uncertainty in many parts of the globe, I am proud of News Corporation’s achievements over the past quarters. We have leveraged our strong assets and solid management team to successfully navigate these unpredictable times. Coupled with our long-term view, I have every confidence that we will build upon these results in the coming quarters and continue to provide consistent stockholder value.” Murdoch’s comments were in the company’s quarterly release and he did not make an appearance on the conference call with analysts.
The television division reported first quarter segment operating income of $133 million, an increase of $28 million or 27% versus the same period a year ago, led by an 8% increase in revenues to $923 million. “The growth reflects increased broadcast network advertising revenues, underpinned by the robust national advertising market and the broadcast of the 2011 Emmy Awards, as well as a greater than two-fold increase in retransmission consent revenues. These increases were partially offset by lower political advertising revenue at the local television stations and increased marketing costs at the broadcast network, in support of the launch of new series Terra Nova, The New Girl and X-Factor,” the company said.
In the company’s conference call with analysts CFO Dave DeVoe reported that local TV station revenues were down in Q1, but essentially flat excluding political.
Cable Network Programming reported first quarter segment operating income of $775 million, a $116 million or 18% increase over the first quarter a year ago, driven by a 13% increase in revenue to $2.12 billion. “Operating income contributions from the domestic channels increased 16%, underpinned by improved results at most networks, including FX Network, the RSNs and Fox News, which marked its 56th consecutive quarter of operating profit growth. The Company’s international cable channels grew earnings 25%, led by continued momentum at Fox International Channels and STAR India,” said News Corporation in its announcement.
For the entire company, fiscal Q1 revenues were up 7% to $7.96 billion. Total segment operating income was up 21% to $1.39 billion.