/// Earnings: News Corp. Beats the Street in Q2
Trouble at its U.K. print division may have made a rocky 2011 for News Corp, but the media conglomerate defied expectations by pulling out of its three-straight-quarter streak of year-on-year profit declines. Revenue at the company was up 2 percent over last year in the second quarter of fiscal year 2012, coming to a solid $8.98 billion vs. last year's $8.76 billion; earnings for the quarter were up 65% to $1.06 billion against last year's $642 million. It's particularly impressive considering the obstacles News Corp. has had to overcome this quarter alone: Dave DeVoe, the company's CFO, clocked the legal cost of the News of the World phone hacking scandal at $125 million—”a figure “substantially higher than our guidance at the beginning of the first quarter,” DeVoe admitted. Accordingly, earnings calls at News will no longer include that guidance—just tallies of the previous quarter's expenditures (COO Chase Carey estimated that settlements accounted for just 15 percent of that cost, with the rest taken up by legal fees). Lost revenue from the paper itself continued to dog the conglomerate's bottom line. News Corp's white knight this quarter was its cable division—strong performances by new and established series on FX and the start of the presidential campaign season for Fox News Channel gave the unit an edge, as did the division's regional sports networks (RSN's). The company said that this season's NBA lockout more or less corresponded to the prior season's contract dispute – presumably it expects higher revenue still during Q2 of 2013. Overall, the division grew $147 million year-over-year, from $735 million to $882 million. Ad revenue on domestic cable networks saw a 6% uptick, led by ratings gains at FX. with Louie , American Horror Story , and Justified among the network's hits. Carey indrectly referenced the weak scatter market: “The advertising markets, while not quite as robust as they were six months ago, remain solid,” he said. Carey said that ad sales on FX had seen “strong double-digit growth,” while RSN's were “up in the mid-single-digits.” News Corp's digital investments paid off this quarter, as well. “The majority of the [digital] revenue predicted for this year is already captured,” said DeVoe. The number so far is $200 million from deals with Netflix and Amazon, and Carey said he saw potential for a great deal of growth, as far as digital is concerned.
Earnings: News Corp. Beats the Street in Q2
- 02/10/2016 • YouTube Debuts First Original Content but Won’t Say How Many Subscribed to Service
- 01/21/2016 • Broadcast TV Is Still Outpacing Netflix’s Top Shows by Millions of Viewers Per Episode
- 01/20/2016 • From Reducing Ad Loads to Declaring War on Netflix, Here’s How the TV Industry Is Gearing Up for 2016
- 01/13/2016 • Step Aside, Cord Cutters and Cord-Nevers. Showtime Is Targeting ‘Cord Cobblers’