(Reuters) - Rupert Murdoch’s News Corp (NWSA.O) posted a better-than-expected quarterly profit on Wednesday driven by strong growth at its cable networks and movie studio offset by declines at its publishing business.
Net income rose to $1.06 billion, or 42 cents a share, for the fiscal second quarter, compared with $642 million, or 24 cents a share a year ago.
Revenue rose 2 percent to $8.98 billion.
Adjusted net income was 39 cents, after excluding one-time accounting gains offset by charges including an $87 million charge for ongoing payouts related to its UK phone hacking scandal. Analysts on average forecast profit of 34 cents, according to a poll by Thomson Reuters I/B/E/S.
Operating income at its cable network unit, which includes FX regional sports networks, jumped 20 percent to $882 million as the fees paid by U.S. cable and satellite distributors grew by 9 percent while international affiliate fees grew 19 percent. Advertising revenue at the domestic cable channels grew 6 percent during the period, with growth offset by the NBA lockout.
Profits at its filmed entertainment unit more than doubled to $393 million on the theatrical release of the “Alvin and the Chipmunks: Chipwrecked” movie and home entertainment performances by “Rio” and “Rise of the Planet of the Apes”.
But the company’s publishing unit’s profits fell by 43 percent to $218 million due to lower advertising revenue at its Australian newspapers, integrated marketing services business and the closure of its UK tabloid The News of the World.
“We thought the numbers were terrific across all the divisions except publishing,” said Collins Stewart analyst Thomas Eagan.”
After six months of scandal and crisis management in the wake of the phone-hacking affair at its UK tabloid papers, shares of News Corp (NWSA.O) have reached new heights as investors say the so-called ‘Murdoch discount’ has shrunk.
That scandal which has seen the departure of key executives, as well as resignations and arrests of some journalists, has left News Corp reeling since last summer but investors have put that behind them in recent months.
Earlier this month, News Corp named former Bloomberg LP chief executive Lex Fenwick to lead its Dow Jones & Co unit, which houses its Wall Street Journal newspaper.
Murdoch hopes that Fenwick will be able to focus his expertise with financial markets services to fully exploit Dow Jones’ suite of financial data products.
Dow Jones’ enterprise unit includes Dow Jones Newswires, DJ FX Trade, Factiva information and Dow Jones VentureSource database.
Dow Jones and Bloomberg LP are competitors with Thomson Reuters.
Reporting By Yinka Adegoke; Editing by Bernard Orr