News Corp reports $843 million first quarter profit

MUMBAI: US media conglomerate News Corp reported a first-quarter profit of $843 million, versus last year’s loss of $433 million.

Star's first quarter operating income was slightly above a year ago as six per cent subscription revenue growth and a decline in programming costs were mostly offset by lower ad revenues at Star Plus. The decrease in ad revenues reflects last year's contribution from Kaun Banega Crorepati 2.

News Corp's television segment reported first quarter operating income of $192 million, an increase of $32 million, or 20%, versus the same period a year ago primarily reflecting higher contributions from Fox partially offset by the launch of MyNetworkTV.

At the Fox Broadcasting Company (FBC), first quarter operating results increased 65 per cent compared to a year ago as increased pricing drove higher advertising revenues. Additionally, lower primetime programming costs also contributed to the year on year growth.

Fox Television Stations (FTS) first quarter operating income increased seven per cent as FTS garnered higher political advertising revenues while also increasing its market share on
Fox prime-time ratings strength and the continued success of local news. Ad revenue growth was partially offset by costs associated with the further expansion of local newscasts and by development spending to redesign local station websites including the offer of Fox on Demand.

The film segment reported first quarter operating income of $239 million as compared to $368 million reported in the same period a year ago. The year on year decline is primarily due to record first quarter results in fiscal 2006 which included strong syndication contributions from Twentieth Century Fox Television (TCFTV), as well as home entertainment contributions from Robots and Hide and Seek and the pay-tv availability of Alien vs. Predator and I, Robot.

Current year first quarter film results were largely driven by the theatrical success of The Devil Wears Prada, which has grossed over $275 million in worldwide box office, and the pay-TV availability of Fantastic Four. The quarter also included launch costs for the summer hit Little Miss Sunshine and pre-launch costs for the home entertainment release of X-Men: The Last Stand, released on 2 October and Ice Age: The Meltdown, which is scheduled to be released on 21 November.

News Corp chairman and CEO Rupert Murdoch said, "The operational momentum we exhibited throughout our record fiscal 2006 continued during the first quarter of fiscal 2007. Sustained market-leading positions at our cable networks and television stations, along with stronger advertising at the Fox network, produced double-digit operating income growth in the cable network programming and television segments.

"Additionally, as the results demonstrate, Sky Italia has successfully leveraged its subscriber growth over the past year to dramatically lower its operating losses. And while our film segment faced difficult comparisons with a year ago, our theatrical successes over the past six months are poised to generate significant returns in the quarters ahead as these titles are distributed across additional distribution platforms.

"We have also begun to capitalise on the rapid growth at our new media assets, where News Corporation websites now rank second in the US in total page views and fifth in unique visitors. Our recently announced landmark deal with Google for textual search is expected to generate $900 million over three and a half years, signifying our ability to monetize our traffic in ways that make sense
for our audience and quickly moving our new media properties toward profitability."

Cable network programming operating income was up 26 per cent on affiliate and advertising growth at the Regional Sports Networks and FX. Fox News ratings dominance continues, aintaining its position as the number one cable news network for nearly five years.

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