News Corp reports slump in profits

Rupert Murdoch’s company reports 24% drop in third quarter profits, though Fox News had highest ever operating profit Rupert Murdoch’s News Corp is prepared to walk away from its controversial bid for BSkyB if the price keeps rising, its chief operating officer said. News Corp has bid 770p a share for BSkyB but the broadcaster’s shares are now 849p. Chase Carey, chief operating officer, told analysts that BSkyB’s share price was “clearly troubling” and was “unrealistic” given the challenges he sees ahead for the broadcaster as Murdoch’s company posted its quarterly results. Carey’s comments came as News Corp, owner of Twentieth Century Fox and the Times newspaper, reported a 24% slump in its third quarter profits as the success of Avatar proved tough to match. News Corp reported a fall in net income to $639m (£387m), or 24 cents a share, from $839m, or 32 cents, a year earlier. Fox News reported its highest ever operating profit, but filmed-entertainment sales slid 36% to $1.55bn as the quarter’s movies didn’t measure up to Avatar, the biggest box-office movie of all time. Film earnings fell by half to $248m. In a statement, News Corp chairman Rupert Murdoch said the third quarter figures had faced “challenging comparisons” thanks to the enormous success of Avatar a year ago. “Looking beyond our film business, I am delighted with the continued and significant operational momentum of our channels businesses,” he said. Murdoch said he was particularly pleased with News Corp’s results in television, a segment that “viewed by the market just one year ago as a challenged business, more than quadrupled its earnings contributions over the prior year quarter on the strength of the national advertising market, increased retransmission consent revenues, and the popularity of our programming.” Television revenues rose 23% thanks to a strengthening ad market and revenues for Super Bowl XLV and lower costs. Revenue declines for News Corp’s UK and Australian newspapers and the costs of launching iPad newspaper The Daily helped drag down publishing returns that reported an operating income of $36m, a $207m decrease compared with the $243m reported a year ago. Most of that decline, $125m, was due to the litigation costs at News’ Integrated Marketing Services. The slump in figures comes as News Corp fights off problems in its UK newspaper and satellite TV businesses. The company’s attempts to take full control of BSkyB have been hampered by scandal as well as demands for a higher price from shareholders. Last month News Corp issued an “unreserved apology” to eight victims of the phone hacking scandal that has dogged the firm’s UK newspaper division. “Past behaviour at the News of the World in relation to voicemail interception is a matter of genuine regret,” the company said in a statement. “It is now apparent that our previous inquiries failed to uncover important evidence and we acknowledge our actions then were not sufficiently robust.” Before the statement News had maintained the scandal was the work of a rogue reporter. But the position became untenable as Scotland Yard’s investigation gathered pace. The News of the World’s chief reporter, Neville Thurlbeck and Ian Edmondson, who was sacked as associate editor (news) in January, have both been quizzed by the Yard. Lord Prescott, former deputy prime minister and a hacking victim, is suing the Metropolitan police over their initial handling of the phone tap inquiry. Prescott and Labour MP Tom Watson have used parliamentary privilege to claim the new inquiry has now spread to The Sunday Times and The Sun. Prescott has said Murdoch’s takeover of BSkyB should be delayed until the phone-hacking inquiry is over. News Corporation Media business BSkyB BSkyB United States Dominic Rushe guardian.co.uk

Posted by on May 4, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.