{alltv} News Corp posts higher profit on cable, advertising

Wednesday, November 3, 2010

{alltv} News Corp posts higher profit on cable, advertising

NEW YORK (Reuters) – News Corp on Wednesday posted a higher profit in its fiscal first quarter, helped by strong performance at its cable networks and higher advertising revenue at its newspapers and broadcast stations.

Shares climbed 3 percent in after-market trading as investors warmed to another quarter's evidence of an advertising recovery. The company reiterated its forecast for operating income growth in the low double-digit range for the fiscal year 2011.

The company, controlled by Rupert Murdoch, posted a profit of $775 million, or 30 cents a share for the quarter ended September 30, compared with $571 million, or 22 cents a share, a year ago.

After adjusting for a tax benefit of 3 cents, News Corp profit was 27 cents a share, ahead of average analyst forecast of 24 cents

Revenue rose 3.2 percent to $7.43 billion.

News Corp is home to the Fox broadcast and cable networks, Twentieth Century Fox movie studio and newspapers including The Wall Street Journal and The Sun in the UK.

The company has proposed buying the 61 percent of UK satellite TV provider BSkyB it does not already own for 700 pence per share or $12.5 billion. The proposal is going through a UK and European regulatory review.

Its bottom line was boosted by its share of BSkyB's income during the period.

Fox's cable networks had 17 percent revenue growth thanks to Fox News's U.S. ratings leadership, helping to increase operating income domestically by 23 percent.

Newspaper advertising revenue was up 13 percent.

Chief Operating Officer Chase Carey said the recovery in advertising growth appeared to show no sign of weakening beyond January 1, but he said the company remained cautious.

The strong performance was offset by its satellite TV and movie units as well as losses at its digital unit, which includes social networking site MySpace.

MySpace relaunched this month as a social entertainment site rather than a direct social networking rival to market leader Facebook.

Carey warned that News Corp expects MySpace to stabilize and achieve a clear path to being profitable.