MUMBAI: News Corporation recorded a clear 100 per cent increase in its profits for Q3 2006. The net income doubled to $820 million from $400 million a year ago.
The company recorded a third quarter operating income of $1.0 billion, an increase of 14 per cent over the $889 million a year ago on revenues of $6.2 billion, up $155 million from the $6.0 billion reported in the third quarter of fiscal 2005.
In an official release, News Corp., attributed the growth to good performance by its television, cable network programming and magazines and inserts segments, and have a $90 million improvement at SKY Italia.
The television segment reported third quarter operating income of $286 million, an increase of $65 million, or 29 per cent, versus the same period a year ago, primarily reflecting higher contributions from the Fox Broadcasting Company (FBC) and Star.
Star's third quarter operating income increased 28 per cent as advertising revenue growth, mainly from India, drove total revenues up 14 per cent. Advertising gains were led by weekend programming initiatives at Star Plus and by the growth of Star One and Star Gold.
Commenting on the results, chairman and CEO Rupert Murdoch said, "We are obviously pleased with the 14 per cent operating income growth and two-fold increase in net income we delivered this quarter. Our growth was as diverse as it was deep: continued subscriber expansion at SKY Italia; ratings success at our broadcast network; sustained momentum across our array of cable channels; and a dramatic increase in equity earnings from DIRECTV.
"This quarter also saw accelerated progress in our new media evolution. MySpace expanded to over 70 million registered users, solidifying its prominence as one of the fastest growing sites on the Internet. We also launched Mobizzo, a comprehensive new destination for mobile content, putting us in the vanguard of this exploding new platform. And we reached agreement with our broadcast affiliates on repurposing network content, thus allowing us to aggressively develop new ways of distributing and monetizing our programming across the full range of new media platforms.
At the same time, as we invest in these new opportunities, our strong balance sheet has enabled us to continue aggressively with our stock repurchase program. We have completed close to $2.5 billion of the original $3.0 billion buyback program we initiated last June, and today we announced that the Board of Directors has approved an increase in the stock buyback program to $6.0 billion. This $3.0 billion step up clearly reinforces our view that repurchases of News Corporation shares are among the best uses of our cash in today's environment," says Murdoch.
At the FBC, third quarter operating results were profitable versus a loss a year ago as ratings momentum and higher pricing drove primetime advertising revenue growth, the company said. The higher primetime advertising revenues in the current year were partially offset by increased programming costs for several returning series including American Idol and 24, which, along with House, fueled ratings growth of 17 per cent among adults 18-49 for the quarter. Additionally, the third quarter a year ago included a loss associated with the broadcast of Super Bowl XXXIX.
Fox Television Stations (FTS) third quarter operating income declined only 4 per cent despite the benefit a year ago from FBC's broadcast of Super Bowl XXXIX. Primetime ratings strength and the continued success of local news drove advertising revenue growth which was partially offset by increased local sports rights and the further expansion of local newscasts, said an official statement.
Sky Italia reported third quarter operating income of $69 million, an improvement of $90 million compared to a year ago on local currency revenue growth of 17%. This improvement primarily reflects the addition of 472,000 net new subscribers over the past 12 months, bringing Sky Italia's subscriber base to 3.71 million at quarter-end.
The Filmed Entertainment segment reported third quarter operating income of $225 million versus the $251 million reported in the same period a year ago. The year on year decline is primarily due to comparisons with record results a year ago led by the home entertainment performances of Alien vs. Predator, Napoleon Dynamite and I and Robot.
According to News Corp., the third quarter film results were largely driven by the domestic home entertainment performances of Walk the Line and Transporter 2 and by the continued success of Fantastic Four in the international home entertainment market. Twentieth Century Fox Television (TCFTV) had increased contributions versus the third quarter a year ago, primarily reflecting continued momentum in home entertainment sales, most notably from Family Guy and 24.
Cable Network Programming reported third quarter operating income of $211 million, an increase of $39 million over last year's result. The 23 per cent growth primarily reflects advertising strength at the Fox News Channel and affiliate revenue growth at the Regional Sports Networks (RSNs), the release adds.
