News Corp.’s Net Income More Than Doubles, Led by Its Cable Networks

Joining other media companies in reaping the benefits of a rebounding advertising market, the News Corporation said Wednesday that it had more than doubled its net income in the quarter that ended Dec. 31. The News Corporation reported net income of $642 million, or 24 cents a share, compared with $254 million, or 10 cents a share, in the period a year earlier. The company registered a $275 million charge related to the layoffs and changes at MySpace, the beleaguered social networking site that it is trying to sell.
As in previous quarters, cable networks like Fox News Channel and FX were the company’s profit center, generating nearly 60 percent of its overall operating income, the chief operating officer, David F. DeVoe, said on a conference call with analysts. Advertising revenue at the cable networks gained 17 percent over year-ago levels, and affiliate fee revenue was up 11 percent. Another media conglomerate, Time Warner, reported on Wednesday a 21 percent rise in ad revenue in the quarter.
Rupert Murdoch, the News Corporation’s chief executive, did not participate in the conference call, but he said in a news release that the earnings “demonstrate the mounting vigor of our global channels business.”
Foreshadowing future gains in affiliate fees, Chase Carey, the president and chief operating officer, said the company expected “appropriate increases” for Fox News in future negotiations with cable and satellite distributors. More broadly, Mr. Carey forecast “at least solid double-digit earnings growth for the next several years” for the company’s cable networks.
Executives of the News Corporation were similarly bullish about fees for the retransmission of local television stations. They acknowledged, however, that the company took a temporary hit late last year when there were much-publicized blackouts of programming. The two-week blackout of the Fox network in Cablevision households cost News Corporation about $17 million in operating income, and the nearly monthlong blackout of some sports and entertainment channels in Dish Network households cost the company about $30 million.
For the quarter, which was its second fiscal quarter, the News Corporation reported total revenue of $8.76 billion, up slightly from $8.68 billion.
In the conference call, Mr. Carey said little about the company’s struggle to take over the British Sky Broadcasting Group. Citing a process with regulators, he said there is “nothing more I can add.”
The News Corporation narrowed its losses at its other satellite TV assets, including SKY Italia, which Mr. Murdoch said appeared to be “back on track.”
The company’s film segment was relatively weak — “not a year to remember,” Mr. Carey said, but “that is the nature of the business.” Along with Fox News he highlighted the performance of FX and its hit drama “Sons of Anarchy,” which delivered the channel’s highest rating in its history among 18- to 49-year-olds last fall, and the performance of the Fox broadcast network, which profited from popular sports telecasts and prime-time shows.
While the income from the Fox network and local stations is small when compared with that of their cable siblings, they remain a prominent part of the company’s portfolio, and Mr. Carey said the combination of “American Idol” in the spring and the forthcoming “X Factor” in the fall were “a really powerful foundation” for the network’s future.
On a day when Mr. Murdoch unwrapped The Daily, a next-generation newspaper for tablet computers, the News Corporation reported increased losses in its digital media group, which includes MySpace. About 500 employees were dismissed last month in a revamping of MySpace, and Mr. Carey reaffirmed on Wednesday that the company was considering a sale and other “strategic alternatives” for the social media site.