News Corp. Earnings Slip on Lack of Blockbuster

News Corp.’s (NASDAQ:NWSA) third-quarter earnings were down from a year ago largely because the media conglomerate lacked a blockbuster to match the enormous revenue generated last year by the record-breaking film Avatar.

For the quarter ended March 31, News Corp. reported net income $639 million, or 24 cents a share, down from $839 million, or 32 cents a share a year ago.

Excluding one-time costs, net earnings per share were 26 cents. Still, the company fell just short of analysts’ forecasts, missing by one cent. Analysts usually exclude one-time costs from their forecasts.

Revenue fell 6% to $8.26 billion from $8.79 billion a year ago.

“As we anticipated, News Corporation’s third-quarter financial results faced challenging comparisons when set against last year’s record Avatar contribution at our Filmed Entertainment business,” News Corp. Chairman and CEO, Rupert Murdoch, said in a statement.

News Corp’s filmed entertainment unit reported income of $248 million, compared with $497 million in the same period a year ago. Last year’s results, the largest in News Corp’s history, were driven by the box office success of Avatar, which contributed more than half of last year’s quarterly operating profit, the company said.

While the film unit had trouble keeping pace with year-earlier results, other News Corp. units showed growth.

For example, cable network programming reported third-quarter income of $735 million, a 25% increase over the year-ago quarter, driven by a 13% increase in revenue, the company said.

News Corp. also said affiliate revenue grew by 10% at its domestic cable channels and 21% at its international cable channels, primarily based on higher rates and more subscribers. The domestic increase was led by rate increases at the Regional Sports Networks, while the international increase was driven by growth in Latin America and Asia, the company said.

Publishing income fell by $207 million primarily due to $125 million in litigation charges. Excluding that one-time expense, publishing income fell $82 million from last year’s third quarter due to advertising revenue declines at the company’s Australian and U.K. newspapers, as well as costs related to the launch of the company’s computer tablet publication, The Daily. Also contributing to the decline was the lack of income from the Dow Jones Index business, due to its sale in March 2010.

Social networking site Myspace also acted as a drag on earnings, contributing to a $165 million loss within its unit.