Hit by higher taxes, New York Knicks parent Madison Square Garden (MSG) disclosed a 3.2% decline in fiscal first-quarter earnings on Friday but still managed to exceed forecasts from analysts as media revenue jumped.

MSG, which is also the parent of the New York Rangers and Radio City Music Hall, said it earned $20.6 million, or 26 cents a share, last quarter, compared with a profit of $21.3 million, or 28 cents a share, a year earlier.

Analysts had been calling for EPS of just 19 cents.

Revenue jumped 15% to $204.2 million, essentially matching the Street’s view of $204.1 million. Operating margins expanded to 19.7% from 14.8%.

MSG’s third-quarter results were hampered a bit by a surge in income-tax expenses to $18.5 million from $3.9 million tied to year-earlier deferred tax benefits.

Media revenue at MSG, which owns the MSG Network, increased 15% year-over-year to $159.5 million as affiliate fee revenue rose $17 million.

Meanwhile, sports revenue at MSG grew 10% to $31.6 million amid higher suite rental fee revenue and sponsorship and signage revenue.

Shares of New York-based MSG rose 0.63% to $41.89 on Friday morning, giving them a 2012 gain of about 45%.

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