News Corp's profits rose nearly two-thirds year on year to hit USD1.06bn in its fiscal Q2 ending December 31, up from USD642m in the same period a year ago and driven primarily by its cable, film and TV divisions. Total revenues rose 2% to hit USD8.98bn, with the figures beating analyst pessimism over ongoing costs relating to phone-hacking charges. Excluding these potential costs, News Corp says it expects full-year operating profits to grow in the "low- to mid-teen" percentages, in keeping with previous forecasts.
The ongoing UK investigation into the phone-hacking scandal cost News Corp USD87m last quarter and nearly USD200m in the six months ended December 31. However, CFO David Devoe refuses to estimate the extent of the costs for the remainder of News Corp's fiscal year. Profits at the firm's publishing division fell 43% to USD218m as it felt the closure of the News of the World and advertising fell across its Australian publications. News Corp's ‘other' division was also hit by charges related to the closure, reporting an operating loss of USD191m, USD35m greater than the prior quarter despite the positive impact of selling both MySpace and Fox Mobile.
Despite the continuing costs and political fallout, from the UK investigation, News Corp was bolstered considerably by growing profits across its other divisions. ""We thought the numbers were terrific across all the divisions except publishing," says Collins Stewart analyst Thomas Eagan, speaking to Reuters.
News Corp was bolstered by a 20% jump in its cable network operating income, which rose to USD882m. The firm says that profits were driven by growth in domestic channels such as its sports networks and Fox News, which marks its tenth consecutive year as the leading cable news network. Growing affiliate and ad revenues also contributed to the growth.
Profits at News Corp's film unit were also up, more than doubling to USD393m, boosted by the success of films such as Rio, Rise of the Planet of the Apes and X-Men: First Class. The firm also cited growing digital revenues after licensing its films to Netflix and Amazon. TV profits grew 25% year on year to hit USD189m, driven by growing ad revenues and the popularity of shows such as X-Factor and The New Girl.
News Corp by the numbers:
¤ Overall profits up nearly two-thirds year on year to USD1.06bn.
¤ Revenues up 2% to USD8.98bn.
¤ Phone-hacking costs near USD200m in the six months to December 31.
¤ Cable profits up nearly 20% to USD882m.
¤ Publishing segment profits down 43% to USD218m.
¤ Film profits more than double to USD393m.
¤ TV profits up 25% to USD189m.
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