News Corp. posts 70% drop in profit
Finishing up a dismal earnings season for big media, News Corp. today reported a 70% drop in net income to $300 million, excluding one-time events, and a 16% drop in revenue to $7.37 billion for the quarter ended March 31.
Reflecting an industrywide trend, cable television was the conglomerate’s one bright spot. Increased affiliate revenue for Fox News Channel and growth from international TV channels boosted revenue 11% to $1.42 billion and operating income by 30% to $429 million.
The film and TV studio saw revenue fall 9% to $1.47 billion, probably a consequence of the slumping DVD market and a relative lack of holiday hits compared with last year’s “Alvin and the Chipmunks.” However, lower costs helped 20th Century Fox increase operating income by 8% to $282 million.
The Fox network and TV stations were particularly hard hit by the ad slump, with revenue down 29% to $1.28 billion and operating income falling to just $4 million from $419 million. Newspapers, which include the Wall Street Journal and New York Post along with several in Britain and Australia, saw a similar revenue decline of 28% to $1.25 billion and operating income plummet to $7 million from $216 million.
Though it didn’t break out the website separately, News Corp. also noted that MySpace was hurt by the advertising slump.
Results were below analysts’ already diminished expectations and sent shares down in initial after-hours trading, a marked contrast with Walt Disney Co., which beat Wall Street’s predictions with its earnings yesterday and saw its stock surge 12% today.
-- Ben Fritz