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News Corp. Reports Earning

Despite a terrible quarter for primetime programming, News Corp.’s U.S. TV division turned in fairly strong performance for the first fiscal quarter of 2007. TV revenues increased just 5% to $1.1 billion, but operating income rose a strong 20% to $192 million.

Fox Network has suffered a string of poorly performing fall season shows, with ratings dropping 5% in total viewers this year and 10% in viewers 18-49. In addition to weak performance of the baseball playoffs and World Series, none of the networks’ new series have worked and one-time hit The O.C. is withering on Thursday night against ABC’s Grey’s Anatomy.

“I think it’s safe to say it has not been a stellar fall launch for us,” says News Corp. President and COO Peter Chernin, speaking on the company’s quarterly earnings conference call. Because of the strength of returning dramas House and Prison Break,  “we are not in the kind of black hole that we were in the past, but we're certainly not pleased or satisfied with the new dramas we have launched."

Still, because no shows were actually cancelled in the quarter ended Sept. 30, the broadcasting unit's profits were up dramatically, zooming 65% from last year when other series were killed quickly. Fox has plenty of opportunities for write-offs from series likely to be cancelled this quarter, notably Happy Hour.

The network is expected to bounce back beginning in January when American Idol and 24 return to the network’s schedule.

Fox’s cable network division continued its string of stellar quarters. Revenues increased 15% to $889 million, while operating income jumped 26% to $249 million. That leaves the division – which includes Fox Sport Networks, Fox News Network and FX – responsible for 15% of the company’s revenues but 30% of operating income.