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Avatar, newspaper ad recovery boost News Corp.
AFP - Wednesday, May 5
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Chairman and CEO of News Corporation Rupert Murdoch. Murdoch's News Corp. said Tuesday that quarterly net profit declined 69 percent but revenue rose by 19 percent and the results beat the expectations of Wall Street analysts.
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NEW YORK (AFP) - – Box office record-setter "Avatar" and a newspaper advertising recovery helped Rupert Murdoch's News Corp. beat the earnings expectations of Wall Street analysts on Tuesday.
News Corp. posted a net profit of 839 million, or 32 cents per share, for the third quarter of its fiscal year, better than the 22 cents forecast by analysts.
While better than expected, News Corp.'s net profit was down 69 percent from the 2.7 billion dollars in the same quarter a year ago, when it recorded a net gain of 1.2 billion dollars on the partial sale of its ownership stake in television technology firm NDS and a 1.2-billion-dollar tax benefit.
News Corp. revenue increased by 19 percent in the quarter which ended on March 31 to 8.8 billion dollars, better than the 8.23 billion dollars forecast by analysts.
News Corp. shares rose more than five percent in after-hours electronic trading immediately after the results were announced, but were trading 2.92 percent lower at 14.95 dollars after the company said director James Cameron's film would not have the same impact on the bottom line in the current quarter.
"We have a great slate of films coming up but we don't have an 'Avatar' in there," News Corp. chairman and chief executive Murdoch said in a conference call with financial analysts.
News Corp. said advertising revenue rebounded at its Australian, British and US newspapers in the third quarter compared with a year ago.
The newspaper segment saw operating income rose to 131 million dollars from 29 million dollars a year ago. Ad revenue was up 10 percent in Britain, four percent in Australia and by 25 percent at The Wall Street Journal.
Filmed entertainment, which includes "Avatar"-maker 20th Century Fox, which has raked in a record 2.7 billion dollars at the box office, saw operating income increase by 76 percent to 497 million dollars.
Cable television network operating income rose to 588 million dollars from 426 million dollars while direct broadcast television operating income fell to 35 million dollars from 63 million dollars.
In the conference call with analysts, Murdoch praised the new iPad from Apple saying the tablet computer "will lead a revolution in media consumption and create added value for both our news and entertainment content."
He said The Wall Street Journal has already signed up 64,000 users for its iPad application.
Murdoch also said News Corp. planned to announce a new subscription service in three or four weeks and has been in negotiations with Apple among others.
"We're in final discussions with a number of publishers, device makers and technology companies and we will soon develop an innovative subscription model that will deliver digital content to consumers wherever and whenever they want it," he said, declining to provide further details
As for MySpace, which News Corp. purchased in 2005 for 580 million dollars, News Corp. president Chase Carey declined to comment on rumors the company may be seeking to unload the social network, which has been eclipsed by Facebook.
"Clearly MySpace is a work in progress," Carey said.
"We've got to admit that during the last two or three years I think we made some big mistakes but we've got a fine new management now," Murdoch added.
"They're starting to introduce some new features," he said. "There'll be a lot of changes going over the summer
"The early indications, and they're only early indications, are that we're getting more visitors and they're staying longer," he said. "When that gets substantial we'll get more advertisng."
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