Costs connected with the scandals surrounding its British newspapers didn't stop News Corp. from reporting higher profits as its cable networks registered another strong quarter.
Net income rose 47% to $937 million, or 38 cents a share, in the company's fiscal third quarter, from $639 million, or 24 cents a share, a year ago.
The quarter includes a $63 million charge related to the cost of the ongoing investigations of the cellphone hacking scandal that led to the closure of the British paper The News of the World and a $111 million pre-tax gain from British Sky Broadcasting's share repurchase program. The prior year's quarter had a $125 million charge stemming from litigation at its marketing services business. Excluding all special charges, earnings per share were 37 cents, compared to 26 cents a year ago, the company said.
Revenues rose 2% to $8.4 billion.
"Once again News Corporation showed strong operational momentum in the quarter, driven by significant growth at our Cable Network Programming and Filmed Entertainment segments," CEO Rupert Murdoch said in a statement. "With our disciplined approach to monetizing our brands, I believe we are better situated than ever to capitalize on the increasing global demand for our superior content."
Operating income rose 15% to $846 million at News Corp.'s cable network programming segment. Revenues were up 16%, while expenses grew 17% because of the launch of UFC programming and production of additional NBA games following the league's lockout.
Income at the company's domestic channels increased 17%, driven by double-digit growth at the regional sports networks, FX Network and Fox News Channel, the company said.
Affiliate revenue growth rose 15% reflecting higher rates at all of the domestic networks, including the RSNs and Fox News Channel.
Advertising revenue at the domestic cable channels grew 10% in the quarter, with double-digit gains at Fox News and the National Geographic Channels.
Operating income at News Corp. television segments, including the Fox broadcast network, fell 11% to $171 million. The decline reflects the absence of advertising revenues and operating profit generated by the Super Bowl in 2011. Excluding the effects of the Super Bowl, ad revenue at the TV stations and broadcast networks were flat, with higher prices offset by lower ratings for American Idol.
The company said its revenues from retransmission doubled from a year ago.
"Beyond the ongoing growth of our core businesses, I am very pleased with the company's progress as we execute upon other elements of our strategy to produce sustained, meaningful value for shareholders," Murdoch said. "We continue to pursue our share buyback program, repurchasing nearly $4 billion worth of stock over the last nine months and have just increased the authorization for future buyback purchases by $5 billion. In addition, we continue to opportunistically address non-core assets, as demonstrated by the announced sales of our ownership stakes in Hathway Cable and NDS in the quarter. I am confident in the execution of our strategy which will continue to drive growth, create value for our shareholders and ensure the long-term strength of the company."