News Corp hurt by Star-TV costs
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Higher costs at the Asian satellite broadcaster Star-TV and lower earnings from US films depressed first-quarter results at News Corporation, Rupert Murdoch's media empire.
Net income after tax but before extraordinary items totalled $210m (pounds 135m), down from $222m last time. Revenues rose 5 per cent to $2.2bn.
Fox Television, the company's US network of stations, shone against the generally weaker trend, managing a 30 per cent rise in operating profits, fuelled by acquisitions.
The TV performance helped offset lower profits from the US filmed entertainment division, which includes Twentieth Century Fox, the Hollywood studio. Overall, US operations, accounting for nearly 70 per cent of company- wide revenues, saw operating income climb year-on-year from $208m to $221m.
In the UK, where the company publishes five national newspaper titles, including the Sun and the Times, earnings were down marginally, depressed by lower profits in filmed entertainment and book publishing. The newspaper division, grouped under the News International subsidiary, performed ahead of last year, despite sharply higher prices for newsprint. Circulation gains, as well as higher revenues from advertising, helped push operating income from newspapers to $80m from $77m.
Cover price increases since last year had "little to no effect" on circulation, the company said. Circulation at the Sun remained at the 4 million-plus mark and at the Times at just over 680,000.
BSkyB, 40 per cent owned by News Corp, put in a stellar performance. The satellite and cable broadcaster, which unveiled healthy quarterly earnings on Tuesday, has 4.38 million subscribers. Analysts expect the company to grow even faster if negotiations for rights to rugby union's Five Nations Cup and other European matches end in an exclusive deal.
News Corp's operating income in Australia and Asia was down sharply to just $12m in the quarter, compared with $29m last time, due in part to higher development costs at Star-TV, where new channels are planned. A new cable service in Australia, Foxtel, was launched on 23 October.
Lower earnings from Ansett, the airline and hotels group in which News holds 50 per cent interest, also dampened profits in the Far East. The company blamed industry overcapacity and competitive pricing.
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