Boosted by the the partial sale of its stake in NDS and a tax gain, News Corp (NYSE: NWS). managed to overcome a 47 percent nosedive in operating income to turn in decent earnings for the quarter ending March 31. The company reported roughly flat net income of $2.7 billion for its third fiscal quarter, or $0.91 per share, on revenue of $7.4 billion, down from $8.75 billion. Operating income was $755 million, compared with $1.4 billion last year.
As has been the case with other media companies, the cable group was a saving grace with Fox News Channel nearly doubling its year-ago performance in terms of operating income. The movie studios added as well. But the Newspapers and Information division was down an eye-opening $209 million, producing only $7 million in operating income for the quarter; reduced costs weren’t enough to offset declines in advertising and information service revenue for Dow Jones. One reason News Corp. keeps bragging about WSJ’s circulation gains: advertising revenues dropped 33 percent. On the plus side, it wasn’t red ink.
That’s not the case with “other.” The category that holds Fox Interactive Media and its anchor tenant MySpace, as well as NDS, turned in an even bigger loss than the year-ago quarter — $89 million, down $82 million. FIM’s decline was blamed on lower advertising revenues and the cost of launching MySpace Music late last year. More specifics came up during the call: FIM revenue of $187 million was down 11 percent, with a 16 percent drop in advertising. Costs were up 7 percent due to the roll out of MySpace Music and the launch of other features.
More to come