News Corp. Newspaper Income Up

By: Seth Sutel, AP Business Writer (AP) News Corp., the media company controlled by Rupert Murdoch, reported a 69% jump in quarterly profit Thursday, driven by advertising gains at its Fox television division and at Fox News Channel.

News Corp. earned $465 million in its third fiscal quarter ending March 31, up from $275 million in the comparable period a year ago.

Excluding one-time effects, the earnings rose 54% to $460 million compared with $298 million a year ago. Earnings per U.S.-listed share rose to 31 cents versus 23 cents, easily beating the 27 cents per share estimate of analysts polled by Thomson First Call.

Revenues rose 19% to $5.2 billion from $4.39 billion. More than half of the gain came from the inclusion of $492 million in revenues from SKY Italia, a satellite broadcasting company that News Corp. didn't own in the same period last year.

On a conference call with investors and reporters, Murdoch said the company planned to launch a new Fox channel by the end of the year, and other channels over the next several years, but he declined to offer more specifics. Fox News Channel has been considering the launch of a business news channel.

Murdoch also parried questions about discussions he has been reported to be having about possible deals with John Malone, a major shareholder of News Corp. and chairman of Liberty Media Corp. "There's some exchanges taking place of conversation, but it's a little sporadic," Murdoch said.

Operating income at News Corp.'s television arm, which includes the Fox broadcast network and a group of local TV stations, rose 25% on higher ad prices for prime time TV shows and National Football League broadcasts as well as higher ratings for the hit show "American Idol."

Earnings also jumped 51% at the company's cable networks division, led by Fox News Channel, where operating income doubled. Profits rose 15% at the News Corp.'s other cable channels, which include FX, the Speed channel and a group of regional sports networks.

The company's newspaper division also turned in stronger results. Operating income rose 53% due to higher revenues from circulation from its papers in the United Kingdom thanks to the end of a price war, as well as stronger ad sales in Australia and the U.K. In the United States the company owns the New York Post.

Part of the increase in newspaper profits came from the effect of the U.S. dollar's decline against the currencies of Britain and Australia, where most of the company's newspapers are based. In local currency terms, newspaper earnings rose 22% in the United Kingdom and 20% in Australia.

In other divisions, News Corp.'s Hollywood studios had a 6% rise in profits. The movie studio reported gains from home video income from the "League of Extraordinary Gentlemen," while the company's television studios also reported gains from "Angel," "Futurama" and other shows.

For the first nine months of its fiscal year, News Corp, earned $1.25 billion or 91 cents per U.S.-listed share, versus $676 million or 59 cents per share in the year-ago period. Nine-month revenues rose 20% to $15.44 billion from $12.88 billion.

The company also refined its estimates for full-year results, saying it now expected operating income growth of 17-19%, versus its earlier estimate of double-digit growth.

Last month News Corp. announced plans to relocate its headquarters from Australia, where the company was founded, to the United States in a bid to broaden its base of investors. It will also change its primary stock listing from the Australian market to the New York Stock Exchange.

The company's U.S.-listed shares fell 88 cents to close at $36.50 on the New York Stock Exchange.