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indiantelevision.com Team
MUMBAI: American media conglomerate News Corporation?s second quarter net profit rose 42 per cent to $2.38 billion from $1.06 billion a year earlier, driven by double-digit growth at regional sports networks, Fox News, FX network and National Geographic Channels.
News Corporation reported $9.43 billion of total revenue for second quarter ended 31 December, a 5 per cent increase over $8.98 billion a year earlier. The revenue increase was led by $398 million or 18 per cent growth at the company?s Cable Network Programming segment.
This quarter?s pre-tax results included $1.40 billion of net other income, principally related to gains on the acquisitions of additional ownership stakes in Fox Sports Australia and Fox Star Sports Asia (formerly ESPN Star Sports), as well as a $131 million gain from the company?s participation in British Sky Broadcasting?s (BSkyB) share repurchase program, which is reflected in equity earnings of affiliates.
These gains were partially offset by $65 million of restructuring and impairment charges, primarily related to the company?s international newspaper businesses.
Commenting on the results, News Corp Chairman and CEO Rupert Murdoch said, "News Corporation?s fiscal second quarter performance reflects our strong momentum. Double-digit gains in our cable and television businesses, along with improvements in our publishing segment, drove revenue and earnings growth even as we seized opportunities to invest in our core businesses for long-term and sustainable growth.?
Cable Network Programming reported quarterly segment operating income of $945 million, a 7 per cent increase over the prior year quarter, driven by an 18 per cent increase in revenue. Operating income contributions from the domestic channels increased 9 per cent.
Double-digit revenue growth at the Regional Sports Networks (RSNs), Fox News Channel, FX Network and National Geographic Channels was partially offset by increased programming costs, including expanded college football and Ultimate Fighting Championship (UFC) coverage, as well as higher costs at the RSNs related to the benefit recognised in the prior year as a result of the National Basketball Association (NBA) lockout.
The company?s international cable channels? quarterly earnings contributions increased 3 per cent from a year ago, reflecting strong operating profit growth at the non-sports channels at Fox International Channels (FIC) and Star, partially offset by the costs associated with the inaugural broadcasts of BCCI cricket and the adverse impact of the strengthened US dollar.
Affiliate revenue grew 13 per cent and 42 per cent at the domestic and international cable channels, respectively. Domestic network growth reflects higher rates across all networks, led by growth at the Fox News Channel and RSNs. Approximately 40 per cent of the international affiliate revenue increase reflects strong local currency growth at the non-sports channels at FIC and Star. The balance of the growth was principally from the inclusion of Fox Pan American Sports (FPAS) and Fox Star Sports Asia, partially offset by the impact of the strengthened US dollar.
Advertising revenue at the domestic cable channels grew 8 per cent in the quarter over the prior year period driven by growth across most networks. The international cable channels? advertising revenue improved 29 per cent from the prior year quarter. Nearly two-thirds of the international cable revenue increase reflects strong local currency growth at the non-sports channels at FIC and Star. The balance of the growth was from the inclusion of FPAS and Fox Star Sports Asia, partially offset by the impact of the strengthened US dollar.
Expenses at Cable Network Programming grew 26 per cent in the quarter over the corresponding period in the prior year due to increased sports programming costs, including increased rights costs at the RSNs related to the timing benefit in the prior year resulting from the NBA lockout, rights fees for BCCI cricket in India, expanded college football coverage, UFC rights fees, as well as expenses associated with the consolidation of the FPAS and Fox Star Sports Asia networks. These increases were partially offset by reduced National Hockey League rights costs at the RSNs resulting from this season?s lockout.
