News Corp. Upbeat About 2011


Having turned its losses from the prior year into a tidy profit in 2011, News Corp. forecast that its earnings would increase by double-digits in 2011.

News Corp, whose fiscal year ends in June, is the first major media to take a look longer term health of its business.

Rupert Murdoch, chairman and CEO, who has been somewhat pessimistic about the world economic outlook in the past, said on the company's earnings call that while conditions remain "very fragile," the advertising market is "inexplicably good."

Despite a film business that is unlikely to replicate the success of the record-setting Avatar, and unfavorable changes in foreign exchange, News CFO David DeVoe said the media giant expected the growth rate for operating income to be expand by low double-digits from its $4.46 billion total in 2010.

News COO Chase Carey said the ad market continues to be very strong.

"Our local stations current look to be pacing close to a 30% growth rate for this quarter and the scatter market continue to generate double digit premiums to upfront pricing. Our cable network scatter is even higher than that," he said.

Cable has become News's biggest generator of profits and growth, led by the category-dominant Fox News Channel, its regional sports networks and international channels.

Carey also noted that in addition to having the top movie in Avatar, the company produced TV's two biggest new hits in Glee and Modern Family, both of which have already been sold in to syndication.

Carey added that Fox Broadcasting Co. has been successful, finishing first for the sixth straight year among adults 18 to 49, but has a problem with "a lousy business model."

He said broadcast needs a dual revenue stream. "We've begun this fight and we will prevail. We have right on our side. We have the most valuable programming and deserve to be fairly compensated."

News posted fourth -quarter net income of $875 million, or 33 cents per share, compared to a net loss of $203 million, or 8 cents a share a year ago.

For the full year, the company said net income was $2.5 billion, or 97 cents a share, compared to a $3.4 billion loss, or $1.29 a share, in 2009.

The company said that excluding special charges, its operating income would have been up 30% in 2009.

Read more at B&C here.