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News Corp. Reports 15% Increase in Profit

Media: Advertising sales at its newspapers and cable TV networks feed growth in fiscal third quarter.

May 11, 2000|From Bloomberg News

NEW YORK — News Corp., the media company controlled by Rupert Murdoch, said its fiscal third-quarter profit rose 15%, led by higher advertising sales at its newspapers and cable television networks.

Profit at the world's fourth-largest media company rose to $193 million, or 18 cents per American depositary receipt, from $168 million, or 17 cents, in the year-earlier period. Revenue rose 4.5% to $3.2 billion from $3.1 billion.

News Corp. newspapers such as Britain's Sun and cable networks such as Fox Sports helped drive the growth. The company also didn't have write-offs in its film division, as it did a year earlier. The results mark a return to profit growth for News Corp. after seven straight quarters of declines, most of which reflected tough comparisons against the hit movie "Titanic" in earlier periods.

"Film and newspapers are the big growth sectors," said Matthew Harrigan, an analyst at Stifel Nicolaus who rates News Corp. a "buy." "Cable networks is also a bright spot."

The results matched the average of seven analysts surveyed by First Call/Thomson Financial.

The results include Fox Entertainment Group Inc., in which News Corp. holds an 83% stake after selling the rest to the public in 1998.

Fox's third-quarter net income rose to $19 million, or 3 cents a share, from $8 million, or 1 cent, in the year-ago period. That beat the average 2-cent-a-share estimate of analysts surveyed by First Call/Thomson Financial.

Operating profit at News Corp.'s newspaper division rose 16% to $139 million from $120 million a year earlier because of cost-cutting, higher circulation and higher ad sales.

The film division's operating income more than doubled to $95 million from $38 million. The 20th Century Fox studio benefited from "The Beach" and other movies. A year ago, the studio released the disappointing "The Thin Red Line" and "Ravenous."

News Corp.'s broadcasting division was the one major weak spot for the quarter. Operating income fell 26% to $95 million because of lower audience ratings at the No. 4-ranked Fox network and because of the absence of the Super Bowl game, which Fox broadcast in January 1999.

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