Money Matters, Simplified.
News Corp reports better than expected 3rd Qtr results
by Jamie Anderson - May 5, 2010 - comments
News Corp became the latest of media companies to report an increase in revenue from a recovering advertising market.
Riding high on the resounding success of “Avatar,” News Corporation (NASDAQ: NWSA) announced last quarter results that beat Wall Street expectations.
On an overall basis, News Corporation registered a 19 percent jump in revenue in the 3rd quarter of the fiscal year over the same period last year. It thus clocked revenue of $8.8 billion.
Analysts had projected $8.2 billion revenue for this quarter. Net income of the New York City-based company stood at $839 million.
Spike in advertising revenue
The Rupert Murdoch-controlled company was helped in no small measure by colossal gains in other businesses as well. Advertisement revenue at Fox News as well as The Wall Street Journal witnessed considerable increases comparative to the previous year.
The Fox News Channel reported a 31 percent increase in operating income vis-à-vis the income generated in the 3rd quarter last year. Advertising revenue and higher fees paid by cable providers for the channel were instrumental in propelling the income.
The other cable channels owned by the company also contributed big time by registering a 42 percent increase in profit.
News Corp. also earned $1.2 billion gain as it partially sold off its stake in the technology company, NDS.
Cost cutting measures as well as a spike in advertising revenue benefited the newspapers owned by the company. Put together, the newspapers reported operating profits of $131 million as compared to $29 million last year.
Describing the results as “really exceptional”, an elated Murdoch said he was confident “not just about this quarter, but about the rest of the year.”
“In the ad market, we are seeing strong across-the-board growth,” Murdoch said, claiming that it “bodes well for many of our core businesses.”
The Avatar effect
All said, News Corp owes it to “Avatar” that alone earned more than a whopping $2.7 billion worldwide. In fact, this 3-D epic movie from James Cameron became the largest grosser in history and helped the News Corp tremendously.
Even though some of Avatar’s revenue was included in the last quarter, the movie unit had operating profit of $497 million, up from $282 million a year earlier.
“Despite the solid home entertainment performance forecasted for ‘Avatar,’ we are expecting the film segment to be down approximately $100 million from last year principally due to year-over-year timing of releases,” David DeVoe, chief financial officer, said of the projections for the movie unit for the rest of the year.