Cable Strength Carries News Corp. to 1Q EPS Beat

By Media & AdvertisingFOXBusiness

News Corp. (NASDAQ:NWSA) weighed in with mixed fiscal first-quarter results on Tuesday, as strength in the media titan’s cable arm pushed earnings past forecasts but revenue came up just shy.

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Shares of the parent of The Wall Street Journal and FOX Business climbed as much as 4% in response to the results.

New York-based News Corp. said it earned $2.23 billion, or 94 cents a share, last quarter, compared with a profit of $738 million, or 28 cents a share, a year earlier. Last quarter’s EPS was boosted by $1.4 billion thanks to the sale of its stake in NDS Group to Cisco Systems (NASDAQ:CSCO).

Excluding one-time items, the company earned 43 cents a share, besting forecasts from analysts by five cents.

Revenue grew 2% to $8.14 billion, narrowly missing the Street’s view of $8.16 billion.

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“Our operational discipline and focus on innovation continued to drive the company’s momentum in our fiscal first quarter, led by double-digit growth in our channels business and the global success of our film and television content,” Rupert Murdoch, the company’s chairman and CEO, said in a statement.

News Corp. was carried by a strong performance in its cable network division, which generated a 23% jump in operating income to $953 million.

Profits soared 33% at domestic channels, led by FOX News, Regional Sports Networks and FX Network. International cable channels suffered a 7% decline in earnings, partly due to the stronger U.S. dollar.

Led by RSN and FNC, domestic ad sales rose 8% year-over-year, offsetting a 1% decline for overseas ad revenue.

News Corp. said its filmed entertainment quarterly operating income rose to $400 million from $347 million, thanks in part to the strong box office performance of Ice Age: Continental Drift.

Television operating income rose by a more modest $23 million last quarter to $156 million as local ad sales offset declining national ad revenue and retransmission consent revenues more than doubled.

Operating income at News Corp.’s direct broadcast satellite TV division plunged to $23 million from $119 million amid higher expenses tied to the broadcast of the Olympics.

Lower ad sales across the board drove publishing operating income down to $57 million from $110 million the year before.

News Corp., which is also the parent of FOX News and the New York Post, initially rallied about 4% but was recently up 2.39% to $24.86 in recent trading after hours. The company’s shares have soared 34% so far this year, nearly tripling the gains on the S&P 500.