News Corp. profit rises to Foxy $465M
Newsday (New York)
May 7, 2004 Friday
From Lexis Nexis
Profit jumped 69 percent at Rupert Murdoch's News Corp. in the first three months of the year, boosted by jumps in advertising revenue for the Fox News Channel and "American Idol" on the Fox Broadcast Network, the company said yesterday.
At the same time Murdoch said that, with the help of DirecTV, which News Corp. now controls, he will launch a new cable and satellite channel by the end of this year, with more to follow over the next several years, but he did not specify the themes other than to say they would be "ones in which we have particular expertise."
Net income rose to $465 million in the quarter ended March 31, from $275 million a year earlier. Revenue gained 19 percent to $5.2 billion. News Corp. expects operating income to rise between 17 percent and 19 percent this fiscal year, which ends June 30.
Aided by higher-priced advertising sales that reflected strong ratings, operating income doubled at Fox News Channel compared with a year ago, when coverage of the Iraq war pre-empted regular programs and increased news-gathering costs.
Media analyst Richard Greenfield of Fulcrum Global Partners said that in two years, the renegotiation of fees that cable companies pay to carry Fox News, which are half those that CNN gets, should drive a "huge windfall."
At Fox cable networks overall, which also include regional sports networks and FX, operating income gained 51 percent to $143 million.
At the television unit that includes local TV stations and the Fox broadcast network, whose "American Idol" ratings rose 13 percent over last year's, operating income increased 25 percent to $259 million.
Murdoch said Fox will continue airing the "American Idol" series only once a year for the foreseeable future to avoid "overexposing" it. The series finale this year is attracting $1 million per 30-second spot from advertisers, he said.
At the film unit, operating income gained 6 percent to $214 million, helped by DVD sales of "League of Extraordinary Gentlemen."
Operating income at the company's newspapers, ranging from The Times in London to the New York Post, rose 53 percent to $176 million.