NEW YORK: Operating income for News Corp.’s Fox TV stations and its broadcast network fell 54 percent compared to last year in the company’s first fiscal quarter of 2010. The TV division posted operating income of $38 million on revenues of $795 million for the quarter ending Sept. 30. Last year, the television unit made $83 million on revenues of $829 million. Both the stations and the network were hit by a decrease in local advertising, “particularly in the automotive and movie sectors, as well as lower comparative political advertising,” News Corp. (NYSE: NWS) said.
The Fox TV stations nonetheless set a record for market share during the quarter and did better with the 14 percent decline in revenues as opposed to an expected 21 percent decrease.
Increased programming costs for prime-time fare also cut into the bottom line even though rates for prime-time advertising increased. Sports revenue was down for the division, “principally due to fewer National Football League games broadcast and lower Major League Baseball contributions,” News Corp. said.
The Fox cable networks generated $1.5 billion in revenues, up from $1.25 billion in F1Q08. Operating income increased 41 percent to $495 million on the strength of Fox News Channel, the international channels, regional sports nets, the Big Ten Network and Star.
Consolidated revenues for News Corp., including its newspapers, film, publishing and satellite operations, were nearly $7.2 billion compared to $7.5 billion a year ago. Net income rose 11 percent, however, to $571 million or 22 cents a share, versus $515 million or 20 cents a share one year ago. The increase in profit was attributed to a $422 million write-down last year on the company’s investment in the German division of Sky.
“The strategic steps we took last year to ensure stability during the downturn have proven successful, with significant cost reductions offsetting much of the revenue declines in our television and newspapers and information services segments,” News Corp. chief Rupert Murdoch said in the company’s earnings release. “The economies in which we do business are clearly in better shape than they were a year
ago, and we have further positioned our operations to take advantage of the improvements we are seeing globally. We will continue to manage our businesses smartly and confidently under the security of a strong balance sheet.”
NWS finished the quarter with cash and equivalents of more than $7.8 billion, up from $6.54 billion on June. 30. Long-term debt was $13.2 billion compared to $12.2 billion.
Shares of News Corp. rose from yesterday’s close at just about $11.50 to near $12 today.
More on the Fox TV segment:
August 6, 2009: “Fox TV Stations Report 4Q Operating Income Down 67 Percent”
“These results reflect the overall weakening of the local advertising markets and the absence of contributions from eight stations that were sold in July 2008,” the News Corp. (NASDAQ: NWS, NWSA) earnings release stated.
March 4, 2009: “Fox TV Station 2Q Income Drops 44 Percent”
Operating income at Fox owned-and-operated TV stations dropped by 44 percent 2Q-over-2Q, parent company News Corp. reports. The decline for the company's fiscal quarter ending Dec. 31 was attributed to the implosion in local ad markets and the divestiture of several TV stations.
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