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News Corp profit better than expected, shares up
By Robert MacMillan
Rupert Murdoch, News Corp CEO walks outside the during the Sun Valley media conference in Idaho July 9, 2009. REUTERS/Rick Wilking
NEW YORK (Reuters) - News Corp reported a higher-than-expected quarterly profit as gains at its Fox cable network and film divisions, plus cost cuts, helped offset declines at its television stations and newspapers.
Chief Executive Rupert Murdoch said he expected 2010 to be a year of stability and the company forecast its fiscal full- year operating income would grow in the high single to low double-digit percentage range.
The international media conglomerate, whose shares rose almost 3 percent after the news, said on Wednesday that its fiscal first-quarter net income was $571 million, or 22 cents a share, compared with $515 million, or 20 cents a share last year. Last year's net income included a writedown.
Analysts, on average, were expecting earnings per share of 18 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 4.1 percent to $7.20 billion, beating analysts' average estimate of $7.16 billion. Operating income rose 9.3 percent to $1.04 billion.
"Both the top line and bottom line were ahead of what we were looking for," said RBC analyst David Bank. "As the macro (economy) winds its way back to health, the ability to operate with expense discipline is a huge positive."
News Corp's results echo those of Time Warner Inc and Viacom Inc, which also reported signs of recovery in their movie studios and cable networks.
News Corp's cable programing unit recorded 41 percent growth in operating income, with better performance from its Fox News Channel.
The company's movie operations posted a 56 percent gain in operating income. The unit scored a hit with the international release of the film, "Ice Age: Dawn of the Dinosaurs." RBC's Bank said the movie was one of the most successful international box office hits ever.
The results come as News Corp tries to stem advertising revenue declines at its newspapers and local U.S. TV stations.
News Corp's newspaper unit posted an 81 percent decline in operating income as people gave up their print editions and went online. Advertising sales have fallen as a result. Local TV operating income fell 54 percent.
U.S. media companies have been pleasing their investors by cutting costs to beat Wall Street profit expectations.
News Corp shares rose to $11.90 after hours after closing up 1.05 percent at $11.56 in the regular session.
(Reporting by Robert MacMillan; editing by Tiffany Wu and Andre Grenon)
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