News Corp Q2 profit triples; Star TV operating income up by 43%

MUMBAI: Media conglomerate News Corps second-quarter profit has tripled from $386 million to $1.08 billion, on revenues of $6.7 billion.

Television operating income went up by 20 per cent on strong revenue growth at the pan Asian network Star and lower promotional costs at Fox due to the earlier launch of its fall lineup versus a year ago.

Star's second quarter operating income increased by 43 per cent as advertising and subscription revenue growth, mainly from India, drove total revenues up nearly 30 per cent.

Gains were led by weekend programming initiatives at the number one Hindi general entertainment channel Star Plus and from the successful launch of Star One. Meanwhile subscription revenues increased on new channel offerings and higher pricing.

News Corp chairman and CEO Rupert Murdoch said, "Our performance this quarter reflects the sustained momentum we have generated across the majority of our businesses. We translated the desirable audiences we deliver for advertisers into double-digit earnings gains at our television and cable network programming segments.

"We drastically lowered Sky Italia's operating loss, keeping it on track to deliver its first full year of profitability. We released a number of successful films this quarter each of which should generate strong returns later this fiscal year when distributed in home entertainment.

"We also hit the ground running with our recent new media investments, expanding the number of registered users of MySpace to over 50 million and positioning us to capitalise on the expanding on-line advertising pie as broadband continues to proliferate. Additionally, we are spending considerable time exploring ways to increase the value of our vast content libraries, such as our recently announced deal between FX, the Fox network and DirecTV for on-demand content.

"The sustained financial success we have achieved over the last several years provides us the flexibility to invest in these new business opportunities while at the same time delivering continued fiscal year growth to our shareholders."

The filmed entertainment segment reported second quarter operating income of $299 million versus the $407 million reported in the same period a year ago. The decline was primarily due to difficult comparisons with record second quarter results a year ago, led by the worldwide home entertainment performances of Day After Tomorrow, Garfield, Dodgeball: A True Underdog Story and I, Robot, as well as from the catalogue performance of the Star Wars Trilogy.

The current-year results primarily reflect several successful film and television home entertainment releases, as well as increased revenues from the worldwide theatrical and pay-TV markets. The second quarter film results were largely driven by the worldwide home entertainment performances of Fantastic Four, Kingdom of Heaven, Star Wars Episode III and Mr. & Mrs. Smith, as well as by contributions from various titles including Napoleon Dynamite and Day After Tomorrow.

Additionally, the pay-TV availability of Oscar winner Sideways and I, Robot contributed to the strong quarterly results. The current quarter also included films like Cheaper By the Dozen 2, The Family Stone, The Ringer and Walk the Line, which has grossed over $110 million in domestic box office and won three Golden Globes and got two Oscar nominations.

Twentieth Century Fox Television (TCFTV) increased contributions versus the second quarter a year ago, primarily reflecting continued momentum in home entertainment
sales, most notably from Family Guy and 24.

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