News Corp. reported lower net income for its second fiscal quarter on Wednesday compared with year-ago results. Television earnings tumbled 39% on weaker ratings for post-season baseball on Fox and losses related to the launch of My Network TV.
NEW YORK (AP) — News Corp., the media conglomerate controlled by Rupert Murdoch, reported lower net income for its second fiscal quarter on Wednesday compared with year-ago results that included a gain on an asset sale. Its box office earnings rose on several hits including the “Borat” movie.
The company, which owns MySpace, Twentieth Century Fox and the Fox News Channel, earned $822 million in the three months ended in December, down from $1.08 billion a year ago, when it had a one-time gain from selling an educational publishing business.
Without that gain of $381 million, the year-ago earnings would have been $694 million. On that basis, earnings from continuing operations rose 18 percent in the latest quarter compared with a year ago.
While earnings from movies at the box office and home video jumped 57 percent, television earnings tumbled 39 percent on weaker ratings for post-season baseball on Fox and losses related to the launch of MyNetworkTV, a mini-network on Fox stations.
Murdoch said the company was “disappointed” with the results at MyNetworkTV, where ratings have been “far below expectations.” He said new management has been brought in and will introduce new programming.
MyNetworkTV has stumbled since its launch with a strategy of relying heavily on prime time soap operas. Peter Chernin, News Corp.’s chief operating officer, said the network would move the “telenovela” style soap operas to two nights a week, add a martial arts fighting show and show movies on Thursdays and Fridays.
Meanwhile MySpace, the largest social networking site on the Internet, was poised to become profitable during fiscal 2007, with profitability increasing “dramatically” in the following year, Chernin told analysts and reporters on a conference call.
Murdoch, also speaking on the call, said the company was close to announcing its long-awaited plans to launch a business news cable channel to go up against CNBC, which is owned by General Electric Co.’s NBC Universal. He didn’t go into greater detail.
News Corp.’s revenues during the quarter rose 18 percent to $7.84 billion from $6.67 billion.
The earnings were equivalent to 26 cents per share on a combined basis of the company’s non-voting Class A and voting Class B shares, versus the 25 cents per share that analysts polled by Thomson Financial had been expecting.
The company’s Class A shares, which are more widely held, rose 40 cents to $23.38 in morning trading on the New York Stock Exchange. Earlier in the day the shares reached a new 52-week high of $23.50.
Movie and TV production earnings jumped 57 percent to $470 million on a strong slate including “Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan” as well a strong international earnings from “The Devil Wears Prada.”
Cable network programming profits rose 5 percent on more gains from the Fox News Channel, and profits from newspapers more than doubled to $170 million from $69 million a year ago, when the company recorded a $99 million charge related to upgrading printing plants in the United Kingdom.
Michael Nathanson, an analyst with Sanford C. Bernstein, said in a note to investors that the better-than-expected earnings were due largely to a lower tax rate. The fourth quarter results, he said, were “not great,” but added that the full year operations still look to be “on track.”