By John Jannarone
Of THE WALL STREET JOURNAL
News Corp. (NWS, NWSA) said net income rose 47% in the quarter ended March 31 thanks to growth at its cable networks and also announced it had doubled the size of its share-buyback program to $10 billion.
Net income for the media conglomerate was $937 million, or 38 cents a share, for the fiscal third quarter, compared with net income of $639 million, or 24 cents a share, in the same period a year earlier. Revenue rose 2% to $8.4 billion.
(This story and related background material will be available on The Wall Street Journal website, WSJ.com.)
News Corp. said it took a charge of $63 million related to the costs of ongoing investigations into phone hacking at its U.K. newspaper unit. That charge follows $104 million the company said it had spent on the investigations in the first half of the fiscal year, mostly on fees for outside lawyers and advisers.
The increase in the share repurchase plan is the second since last July, when News Corp. expanded its authorized buyback to $5 billion from $1.8 billion available at that time. The company has bought back $3.9 billion in stock since the July announcement, it said in a statement. Shares of News Corp. have outperformed some other large media conglomerates since the $5 billion buyback was announced.
News Corp. shares were trading 5% higher at $20.35 in after-hours trading.
Driving higher earnings was the cable-network programming division, where revenues were $2.4 billion compared with $2 billion a year earlier. The group, which includes FX and Fox News, reported a 15% increase in operating income to $846 million. News Corp. reported 15% growth in revenue from the fees it charges distributors to carry its domestic channels, thanks to improvements at its regional sports networks and Fox News. Ad revenue at the domestic cable channels increased 10%, driven by Fox News and the National Geographic Channels. Expenses rose 17% due to higher programming costs.
In contrast, News Corp.'s television division, which includes the Fox broadcast network and TV stations, reported lower results. Revenue from the segment fell to $1.2 billion in the March quarter from $1.4 billion a year earlier. Operating income was $171 million, compared with $192 million in the same period of 2011. News Corp. said it made less money partly because it didn't broadcast the Super Bowl this year as it did in 2011. Absent the effect of the Super Bowl, the division's advertising revenues would have been roughly the same as last year. The company noted that while it had higher advertising pricing, its ratings were lower due to declines at "American Idol," which airs on Fox.
In the publishing segment, operating income rose to $130 million from $36 million a year ago. The year-earlier result was depressed by a $125 million legal settlement. Excluding the impact of that charge, operating income fell by $31 million due to lower advertising revenue at U.K. and Australian newspapers and the closure of News of the World. Contributions from Dow Jones, publisher of The Wall Street Journal and this newswire, and HarperCollins were higher.
Filmed-entertainment saw operating income rise to $272 million from $248 million a year earlier. News Corp. said the results included revenues from movies such as "The Descendants" and "Alvin and the Chipmunks: Chipwrecked." The television production studios also saw higher digital distribution revenue and higher syndication revenue for "Family Guy."
-By John Jannarone, The Wall Street Journal; email@example.com