Cable Nets Sink News Corp.


News Corp. reported mixed fiscal-second-quarter results Wednesday morning, with strong performance at its film and Internet units offset by somewhat disappointing results at its broadcast-TV and cable networks.

Overall, revenue rose 18% to $7.8 billion and operating income increased 24% to $1.1 billion for the quarter, fueled mainly by a 57% rise in operating income at its filmed-entertainment division and a threefold increase in revenue to $125 million at its Fox Interactive Media unit.

While cable-network revenue rose an impressive 14% to $920 million during the quarter, operating income was up just 5% to $275 million, due mainly to increased marketing costs at FX and Fox News Channel and the timing of college-sports rights at its regional sports networks.

In a conference call with analysts, News Corp. chief operating officer Peter Chernin said cable’s operating-income performance was “significantly below what we will deliver for the fiscal year.” He added that full-year operating profit at the cable networks should mirror the company’s fiscal-first-quarter performance, when operating income rose 26%.

On the broadcast side, operating income decreased 39% to $112 million while revenue was flat at $1.6 billion, mainly due to poor performance at MyNetworkTV and the Fox broadcasting network.

Chernin said stronger ratings at Fox -- particularly due to programming like American Idol and 24 -- should boost performance at the network in the second half of the fiscal year. He added that while MyNetworkTV has been disappointing, plans to revamp its programming lineup should improve its fortunes.

Later, on a conference call with reporters, Chernin said the launch of the much-anticipated Fox Business Channel should happen in the later part of the calendar year. He added that an announcement is expected soon.

News Corp. stock was up 61 cents each to $24.76 per share in afternoon trading Wednesday.