News Corp. Posts Mixed Quarter11/05/2008 10:51 AM Eastern
News Corp. reported mixed fiscal first quarter operating results Wednesday, as strong growth at its cable networks wasn’t enough to offset steep declines at its Fox TV stations and Filmed Entertainment divisions.
Overall, revenue at the media giant was up 5.6% to $7.5 billion, but operating income declined 9% to $953 million.
At the cable networks, revenue rose 18% to $1.3 billion and operating income increased 31% to $379 million, reflecting strong advertising and affiliate fee increases. The company said its flagship Fox News Channel reported a 27% increase in operating income while the rest of its cable channels collectively reported a 33% gain in operating profit.
On a conference call with analysts, chairman Rupert Murdoch said that its fledgling Big Ten Network sports channel should turn a profit for the first time in fiscal 2009, its second year of operation. While its other new channel—Fox Business Network—is expected to cost the company between $60 million to $70 million this fiscal year, it too could become a force in the next couple of years.
“We’re fighting very hard for greater distribution and we’re achieving it slowly,” Murdoch said of Fox Business. “When we get to 50 million subscribers, we can turn on a lot more heat, put on better programs and be much more aggressive in getting advertising. But I think that’s another year to two years away.”
Fox Business is currently available in about 40 million homes.
While the cable nets performed well, it wasn’t enough to offset poor performance in its other segments.
Fox TV stations, hit hard by the downturn in local TV advertising, saw operating income decline 48% in the quarter. Operating income at Filmed Entertainment, consisting mainly of the 20th Century Fox studio, declined 31% to $251 million. The decline was particularly unfavorable compared to the same period last year, when the studio’s portfolio included blockbusters The Simpsons Movie and Live Free or Die Hard.