Cable Results Drive News Corp.'s 4Q Beat

Driven by solid results at its cable networks, News Corp. (NASDAQ:NWSA) swung to a stronger-than-expected fiscal fourth-quarter profit on Wednesday.

News Corp., the parent of FOX News Channel and FOX Business, said it earned $875 million, or 33 cents a share, last quarter, compared with a loss of $203 million, or 8 cents a share, in the year-earlier period.

Analysts had been projecting EPS of 20 cents.

Operating income slid to $932 million last quarter, down from $948 million a year earlier. Revenue came in at $8.11 billion, topping the Street’s view of $8.06 billion.

“Despite the volatility of world economies, News Corporation continues to thrive on a truly global scale,” said Rupert Murdoch, chairman and CEO of News Corp., in a statement. “These results underscore just how well positioned we are – fiscally, operationally and strategically – for further growth across all of our markets. The opportunity for us to expand the scale of our franchises is significant, including through taking advantage of the continual technological advances that will broaden the reach of our core content and distribution businesses.”

Shares of News Corp. had a muted reaction to the results, edging up 0.2% to $13.95 in extended trading on Wednesday.

News Corp.’s results were driven by its cable networks division, which grew its operating income by $134 million to $563 million last quarter. The growth was led by a 30% jump in domestic cable channels’ operating income and a 40% increase in earnings contributions from international channels.

Boosted by high ratings at FOX News, ad revenue at domestic cable channels jumped by 11%.

Television operating income at News Corp. rose by 13% last quarter to $113 million, thanks in part to improved ad markets. News Corp.’s filmed entertainment business saw its operating income slide from $203 million a year earlier to $137 million last quarter due to lower contributions of worldwide theatrical releases.

The media company’s newspapers and information services unit posted a 20% increase in fourth-quarter operating income to $115 million. Dow Jones, which includes The Wall Street Journal, posted slightly lower operating results despite a 14% rise in ad revenue and an 11% increase in circulation revenue. News Corp. blamed lower contributions from the information services business and the disposition of the Index business. Earnings were flat last quarter at HarperCollins, the company’s book publishing arm.

Earlier on Wednesday, media rival Time Warner (NYSE:TWX) reported stronger-than-expected second-quarter results and lifted its full-year earnings guidance.