Earnings: News Corp. Q1 Profit Up 6 Percent; Digital Revenues On Pace To Reach $500 Million

While the company’s joint venture with NBC Universal is still a ways off from launching, News Corp. (NYSE: NWS) had some tangible benefits to make note of for Q1, as profits climbed 6.2 percent as the earnings came in at $871 million compared to $820 million in the same period a year ago. Revenue rose 21.5 percent to $7.5 billion from $6.2 billion in the same period a year ago. The company, which is now looking to add Dow Jones to its stable of media properties, saw its biggest boost from its entertainment segment, which the company said accounted for 23 percent of earnings and 21 percent of revenue growth. Film and TV production reported profits increased 82 percent to $410 million from $225 million. Still, TV earnings dropped 4.5 percent amid losses from the first year of MyNetworkTV, which was reformed from the ashes of the shuttered UPN network. The company did not break out revenues for its Fox Interactive Media segment, which includes MySpace, though a pre-conference call statement did make note of the online video project with NBCU as well as the content partnership between VeriSign’s Jamba and Fox Mobile Entertainment. Other highlights: More after the jump…

— Newspaper operating income was $156 million, a modest increase from $153 million reported the previous year, while operating income from magazines was $102 million, an improvement of 13 percent over last year’s $90 million.

— Cable network programming earnings rose 34 percent on higher returns from Fox News Channel, the FX network and regional sports networks.

— Net earnings from affiliates, including BSkyB and The DirecTV Group, declined to $255 million from last year’s $264 million. More to come. Earnings release (PDF) | Webcast Transcript (SeekingAlpha)

Update: Fox Interactive Media, which was buried in the “other” segment in News Corp.’s earnings release, had revenues that exceeded $135 million and was up 65 percent year-over-year, largely thanks to display advertising, said Dave DeVoe, News Corp.’s CFO, speaking to participants during the morning conference call. Secondly, revenues from the Google Earth ad alliance produced $50 million in revenue over the past six months, said Peter Chernin, the company’s president and COO.

Chernin On MySpace And Google: “I would say that we are in the very early days. And I think what we’re looking at is, trying to work closely with Google about learning the sort of details, about where the best place to put a search inquiry, what the best usage on a page is, or where the best placement of advertising is… They are making the appropriate payments that they are supposed to do. Their first payment was at the beginning of the year. There was a second one at the beginning of the quarter, and yes they have been paying.”

Fox Interactive’s Growth: FIM continues to grow steadily both in traffic and revenue metrics, News Corp. CEO and Chairman Rupert Murdoch added. He said the company’s interactive unit is on pace to match or exceed its previously stated revenue goal of $500 million for the current fiscal year. “[We] have increased our position as the web’s most viewed online network with nearly 50 billion pageviews in the United States and approximately 100 million unique users worldwide each month,” he said. Murdoch also referred to the purchase of Strategic Data Corporation, which he said will allow Fox Interactive to increase revenues through its targeted advertising across the whole network.

Alliances: Chernin touched on plans for the NBCU video venture and this week’s news about its distribution partnership with Cnet. (See Rafat’s report on Murdoch’s and Chernin’s comments regarding the company’s $5 billion unsolicited bid for Dow Jones here) On the NBCU JV and Cnet distribution partnership, expect more content alliances to come soon: “We are in ongoing talks with various other content partners, but mostly right now, we are really focused on getting this thing up and running, which we would hope to get up and running in our end of summer, beginning of fall. We obviously need to come up with the name pretty quickly. We are in a pretty intensive CEO search right now. But we feel pretty good about both our operating progress in the short-term, but more importantly the response that this has gotten from web distributors, content creators, all of whom I think are looking for a legitimate opportunity to distribute copyright protected content, and a business model that is both good for advertisers and also very convenient for consumers.”

Acquisitions: Most of the purchases News Corp. has embarked on recently have been intended to support FIM. Murdoch: “And that it will be ever, I am sure, of small ones than bigger ones. Some have been extremely small ones, like $5 million, some a bit more. That is all the strength in FIM.”

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