News Corp. profits up 27%

Fox's Winter movies provide $1.1 billion lift

By DADE HAYES

News Corp. rode the Fox movie studio to another quarter of solid growth, posting a 27% rise in profits Tuesday to $1.1 billion on a 17% uptick in revenue to $8.6 billion.

Cable programming was also a big contributor to profits, inching up to $313 million in net income from $284 million despite struggles with the Fox Business and Big Ten networks.

In a conference call with analysts and reporters late Tuesday to discuss earnings, top execs said they didn't have any big acquisition targets in mind. Turmoil in financial markets has hit the media sector hard, they acknowledged, especially ad weakness in auto and telco categories.

Still, Cablevision's Tuesday announcement that it could spin off some of its units prompted News Corp. chief Rupert Murdoch to dub some Cablevision channels "attractive at the right price."

The film studio's winning streak has come to an end this summer, with three titles in a row failing to register with moviegoers -- Eddie Murphy starrer "Meet Dave," toon "Space Chimps" and Chris Carter's "The X-Files: I Want to Believe." (Fox is distributor only on "Space Chimps.") Studio knew before "Meet Dave" opened that the film was in trouble but was caught off guard by the poor performance of "X-Files."

Those results, however, will factor into future quarters. The period ended June 30 saw lots of coin flow in from the likes of "27 Dresses," "Alvin & the Chipmunks," "Juno" and "AVP: Requiem."

The studio recorded its seventh straight year of record operating profit, reaching $1.25 billion.

Television slumped in the quarter, with operating net down 28% on weaker ad revenue at Fox Broadcasting and Fox stations. The writers strike also meant less original programming on the network, which put a crimp in ratings, the conglom said.

News Corp. saw operating net income rise 21% for the full year, hitting $5.4 billion. Annual revenue reached $33 billion, up 15% from fiscal 2007.

Newspaper and information services, fortified by the addition of Dow Jones in December 2007, posted a 21% rise in profits as ad revenue and Web circulation bucked the industry malaise.

A full-year bright spot was Sky Italia, which kicked in operating income of $419 million, an improvement of $198 million vs. a year ago. The increase reflected net subscriber additions of 366,000 over the past 12 months as the subscriber base expanded to 4.56 million.

Chief financial officer Dave DeVoe said revenue should grow at low- to mid-single digits in fiscal 2009. "To the extent that the economy improves, we should do better than that," he said.

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