News Corp. reported a 27% jump in its fiscal fourth-quarter net income Tuesday, fueled by proceeds from the sale of its stake in Gemstar-TV Guide International Inc., as well as double-digit growth from its film, cable networks and newspaper groups.
The media conglomerate reported net income of $1.1 billion, or 43 cents a share, for the quarter that ended June 30, compared with $890 million, or 28 cents, a year earlier. Revenue rose 17% to nearly $8.6 billion from $7.4 billion.
News Corp.'s performance exceeded Wall Street's projections. Thomson Financial said analysts that it polled expected profit of 34 cents a share on revenue of $8.51 billion.
"Other companies may indeed be struggling, but our confidence and ambitions are buttressed by very healthy balance sheets," said Chief Executive Rupert Murdoch, speaking from Beijing on Tuesday in a call with analysts.
The film group was the biggest driver of earnings growth. With operating income of $220 million, more than double that in the same quarter a year earlier, the studio was propelled by robust DVD sales of such popular films as "Alvin and the Chipmunks," "Juno" and "27 Dresses." Revenue for the group rose 5% to $1.5 billion, from $1.45 billion a year earlier.
Peter Chernin, News Corp. president and chief operating officer, said the outlook continued to be healthy over the next year, with upcoming releases such as "The Day the Earth Stood Still" and anticipated sequels "X-Men Origins: Wolverine" and "Night at the Museum 2: Battle of the Smithsonian."
Television was buffeted by the worsening economy. The group's fourth-quarter operating income was $279 million, a drop of $106 million from a year earlier. Chernin said local TV stations were bearing the brunt of the downturn, with declines in automotive, telecommunications and financial services ads. Revenue fell 7% to $1.3 billion, from $1.4 billion a year ago.
The Cable Network Programming group reported a 10% increase in operating income, to $313 million from $284 million.
The gain was fueled by Fox News Channel's double-digit income growth from increased advertising and affiliate rates, as well as contributions from the Regional Sports Networks and the Fox International Channels. Revenue rose 26% to $1.4 billion, from $1.1 billion a year earlier. Chernin said this helped offset the $160 million in first-year losses associated with starting up the Fox Business Network and the Big Ten Network.
Newspapers and information services reported operating income of $262 million, up $59 million from the same time a year earlier, reflecting advertising and circulation revenue growth in Australia as well as the inclusion of results from Wall Street Journal parent Dow Jones & Co., which News Corp. acquired in December 2007. Revenue rose 54% to $1.84 billion, from $1.2 billion a year earlier.
Murdoch singled out the rapid growth of News Corp.'s newspapers online, in particular the Wall Street Journal, whose digital subscribers now exceed 1.1 million.
Fox Interactive Media, the closely watched group that includes online social network MySpace, reported that revenue grew 23% from a year earlier to $225 million because of strong search and advertising revenue gains.
But those gains were more than offset by increased development and technical costs, as well as the costs of adding new features, and Fox Interactive's $6-million contribution to operating income was down $24 million from a year earlier.
Chernin pronounced himself "pleased with the momentum at MySpace." Revenue is up quarter by quarter, he said, and the number of visitors reached a high of 74 million in May. He said first-quarter 2009 interest in branded display ads was strong, and that 50% of all orders included "hyper-targeting," an emerging technology MySpace developed that seeks to make money off social networks by placing ads in front of specific groups of consumers.
For the full fiscal year, News Corp. reported net income of $5.4 billion, or $1.81 a share, an increase of $2 billion from $3.4 billion, or $1.08, reported in fiscal 2007.
Revenue rose 15% to nearly $33 billion from $28.5 billion.
Chief Financial Officer David DeVoe said the company expected an operating income growth rate in the 4%-to-6% range in the coming fiscal year.