Movies Top Cable as Big Mover for News Corp. Earnings
News Corp. sales and operating income got a big boost in the quarter to March 31, 2010, thanks to blockbuster movie Avatar and the huge popularity of Alvin and the Chipmunks. For a change, the studio overtook cable as the company growth engine adding another billion dollars in revenue to company coffers.
Releasing its third quarter earnings May 4, News Corp. reported that filmed entertainment operating income rose 76%, to $497 million, thanks to Avatar, the highest grossing film of all time with box office receipts of $2.7 billion, and Alvin and the Chipmunks: The Squeakquel. Revenue was $2.4 billion versus $1.47 billion a year earlier.
Fox TV Stations recorded a 90% improvement in operating income underscoring a comeback in the local ad market. Television segment operating income was $40 million, up from last year's $9 million thanks to better results from Fox Television Stations and MyNetworkTV, although Fox Broadcasting Company contributions were lower. Fox, along with the rest of the broadcast networks, dropped ad prices in last year's upfront. Television segment revenue for the quarter was $1.2 billion.
Fox News Channel again led the cable unit thanks to higher affiliate revenue and advertising sales, at the same time the company maintained costs. Operating income at the cable network programming unit was up 38% to $588 million. FNC operating income rose 31% while the calbe unit's other networks, which include FX, saw operating income up 42% over the prior period.
The company is also seeing better conditions abroad with advertising up 43% at the company's STAR operations in Asia, led by the Indian market.
Overall, News Corp. operating income was $1.25 billion, a 55% rise. Revenue for the quarter was $8.8 billion versus $7.4 billion a year ago, a 19% increase.
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