Rapid TV News

News Corp shrugs off hacking scandal to post billion dollar Q2 profit

Joseph O'Halloran ©RapidTVNews | 09-02-2012

Almost as its UK publishing division was opening up the cheque book to pay individuals hundreds of thousands of pounds in damages in the wake of the phone hacking scandal, News Corp was posting robust revenues and profits in its second financial quarter.

Overall, News Corp reported for its second quarter ended 31 December 2011 revenue of $8.98 billion, a 2% increase over 2010, and second quarter net income of $1.06 billion, an impressive 65% improvement year on year.

Rather euphemistically, News Corp added that its numbers were partially offset by “declines at the Company’s publishing and other segments.” Specifically the “decline” included an $87 million quarterly charge related to the costs of the on-going investigations initiated upon the closure of The News of the World. For the half year this was $107 million.

Commenting on the results, Rupert Murdoch said: “The significant growth we reported in the quarter in the Cable Network Programming, Television and Filmed Entertainment segments clearly validates our strategy to develop and distribute superior wide-ranging content. I am particularly pleased with the success of our business strategies in spite of the uncertain economic conditions that we continue to face…we will continue to focus on generating superior shareholder returns.”

Driving the revenue increase was growth at the company’s cable network programming, television and filmed entertainment segments. Cable Network Programming reported second quarter segment operating income of $882 million, a 20% increase over Q2 2010, driven by a 9% increase in revenue. Underpinning growth was improved results at the likes of Regional Sports Networks, Fox News and Fox International Channels. That said numbers were partially offset by lower contributions from STAR in India.

The television division reported second quarter segment operating income of $189 million, up 25% year on year, reflecting increased broadcast network advertising revenues from programmes such as the X-Factor and The New Girl; strong Major League Baseball and National Football League programming, as well as a greater than 100% increase in retransmission consent revenues.

In the key DBS segment, there was a clear difference between the divisions. SKY Italia reported second quarter segment operating income of $6 million, an improvement of $18 million versus the $12 million operating loss reported a year ago.

Yet more markedly whereas BSkyB, in which News Corp own just 39% of and will continue to do so for a considerable time to come, posted quarterly and half-yearly earnings of $174 million and $315 million (both well up on 2010); other affiliates—primarily comprised of Sky Deutschland, NDS, Australian and STAR equity firms—posted losses of $32 million and $52 million respectively.