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EARNINGS: News Corp. Profit Drops in Second Quarter

Despite strong growth in the filmed entertainment segment of the company, News Corp.'s second quarter earnings dropped 24% compared to a year ago.

For the quarter, News Corp. said income was $822 million, or 26 cents a share, for the period ending December 31, 2006, down from the 1.08 billion (33 cents a share) the company reported a year ago. The year-ago period included a gain from selling an educational publishing business.

Consolidated operating income was up 24 percent for the second quarter with $1.1 billion versus $920 million a year ago. The company attributes the growth to filmed entertainment, whose earnings grew 57 percent, as well as improved performance at the cable networks, newspapers and satellite segments.

Filmed Entertainment reported a second quarter operating income of $470 million versus the $299 million reported a year ago. The company attributes the gain to the success of releases like The Devil Wears Prada and Borat, and an increased demand for movie and television DVDs.

The TV segment reported a second quarter operating income of $112 million, a decline of $71 million from the same period a year ago. The decline is attributed to losses from the launch of MyNetworkTV, a weak fall season and lower contributions from the Fox Broadcasting Company and STAR.

MySpace created $518 million in revenue during the quarter and posted an operating profit of $1 million.The division that owns MySpace also posted a 41% increase in revenue.