Cable Nets Help News Corp. Double 1Q Income11/05/2003 8:46 AM Eastern
News Corp. more than doubled its net income in its fiscal first quarter ended Sept. 30, fueled by strong gains in its filmed-entertainment unit and its cable networks.
Net income in the quarter rose to $422 million, or 32 cents per share, versus $162 million (12 cents) in the year-earlier period.
Operating income surged 31% to $719 million, spurred mainly by strong DVD sales of film and television titles.
The company’s cable networks -- including Fox News Channel, FX, regional sports networks and Speed Channel -- reported operating income of $133 million, up 13% over the same period last year, reflecting direct-to-home subscriber additions, higher affiliate rates and increased advertising sales.
Double-digit revenue growth at the regional sports networks and 14% revenue growth at Fox News helped to drive overall cable revenue up 13% to $627 million in the quarter.
In a conference call with analysts, News Corp. chairman Rupert Murdoch said cable-network revenue could climb significantly in the next three years, mainly because carriage agreements for Fox News are expiring.
"We’re coming over the next three years to the end of our first contracts there, which are at very, very much lower prices than CNN [Cable News Network], " Murdoch said. "So long as we continue to dominate the news-channel market, we see significant increases in revenue coming there from price rises as the contracts fall due."
News Corp. president and chief operating officer Peter Chernin said on the conference call that negotiations with Cox Communications Inc. regarding its Fox Sports Net regional sports networks are moving ahead, but he declined to give specifics.
"We are involved in negotiations right now, and it’s a productive negotiation," Chernin said. "We would hope to come to a positive resolution to that negotiation in the months ahead. Beyond that, we have chosen not to comment on that negotiation publicly. We are optimistic that we will come to a satisfactory resolution for both sides."