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News Corp. profits squeezed by higher TV costs

News Corp. Wednesday said quarterly profit fell 8 percent as higher Super Bowl programming expenses at its Fox TV network and a loss from restructuring a regional cable programming deal offset robust growth in cable network advertising and films.
/ Source: Reuters

News Corp. Wednesday said quarterly profit fell 8 percent as higher Super Bowl programming expenses at its Fox TV network and a loss from restructuring a regional cable programming deal offset robust growth in cable network advertising and films.

The owner of the Fox Entertainment Group and Sky Italia said profit fell to $400 million, or 13 cents a share, in the fiscal third quarter ended March 31 from $434 million, or 15 cents a share, a year earlier.

Revenue rose 17 percent to $6 billion.

Wall Street expected the company to post a profit of 17 cents a share on revenue of $5.8 billion, according to Reuters Estimates.

Quarterly results were dragged down by a 15 percent drop in TV operating income due largely to higher programming costs at the Fox Network from the Super Bowl.

Higher expenses at the TV network offset a stellar 55 percent rise in advertising revenue from its roster of hit cable channels including Fox News and FX.

Television revenue could also be hurt by a recent report by ABC, a division of Walt Disney Co., that a former contestant on the hit show "American Idol" had a personal relationship with a judge, the pop singer Paula Abdul. An Abdul representative has previously denied the allegations.

News Corp.'s filmed entertainment division also saw a 15 percent rise in operating income to $251 million, boosted by "Alien vs. Predator" and the international release of "I, Robot."

New York-based News Corp., which in March completed the purchase of shares of the Fox Entertainment Group it did not own, is likely to turn its attention to buying back shares of its voting stake from Liberty Media or launching a big buyback of its shares, analysts have said.