News Corp.'s profits dipped despite strong advertising gains at its broadcast and cable channels because of special charges, including a restructuring charge for its scandal-plagued U.K. newspapers.
First-quarter net income was $738 million, or 28 cents per share, versus $775 million, or 30 cents a share, a year ago. The results were impacted by a $91 million pre-tax restructuring charge relating to the company's British papers, including the News of the World, which was closed following reports that the paper had been hacking into the cell phones of newsmakers. The company also had another $130 million in other pre-tax charges. Without the special charges, News Corp. says its net would have been 32 cents a share, up from 29 cents a year ago.
Revenues were up 7% to $7.96 billion.
"The exceptional strength of our financial results during the first quarter across the majority of our segments is confirmation that News Corporation's core operations are strong and that we are on course to achieve our strategic and financial objectives," said chairman and CEO Rupert Murdoch, in a statement. "While we continue to remain mindful of the persistent economic uncertainty in many parts of the globe, I am proud of News Corporation's achievements over the past quarters. I have every confidence that we will build upon these results in the coming quarters and continue to provide consistent stockholder value."
News Corp. cable network programming group notched operating income of $775 million, up 18% from $659 million a year ago, with revenues ahead 13%. At the U.S. channels, affiliate and advertising revenue grew 9% and 13%, respectively, led by FX.
The television segment, which includes the Fox broadcast network, registered operating income of $133 million, up 27% from $105 million on an 8% increase in revenues. The gains came from increase network ad revenues generated by a robust national advertising market and the broadcast of the 2011 Emmy Awards. At the same time, retransmission-consent revenues increased two-fold, the company said.
Those gains were partially offset by lower political ad spending at the stations, and increased market costs at Fox to launch Terra Nova, The New Girl and X-Factor, which was renewed for a second season today.