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News Corporation Reports First Quarter Operating Income of $1.04 Billion; Growth of 9% over the Year Ago Quarter.

Article Excerpt
Net Income Increases by 11% to $571 Million on Revenue of $7.2 Billion

NEW YORK -- News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today reported first quarter consolidated operating income of $1.04 billion, an increase of 9% compared with $953 million of operating income reported a year ago. This result reflects double-digit percentage profit increases at the Filmed Entertainment, Cable Network Programming and Book Publishing segments, partially offset by decreases at the Television, Direct Broadcast Satellite Television, Newspapers and Information Services and Other segments.

First quarter net income of $571 million ($0.22 per share) increased 11% versus net income of $515 million ($0.20 per share) reported in the first quarter a year ago. The year-on-year increase is largely driven by higher operating profit and equity contributions from affiliates due to the absence of a $422 million write-down of the Company's investment in Sky Deutschland AG (formerly known as Premiere AG) taken during the prior year period. These improvements were partially offset by the absence of the gain on the sale of eight television stations included in Other, net in the prior year.

Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said:

"I am pleased that News Corporation has delivered exceptionally strong results this quarter, despite continued macro-economic challenges. Operating income growth was led by gains at our worldwide cable network programming businesses and renewed momentum at our Filmed Entertainment segment, reflecting our strong slate of films at the global box office.

"The strategic steps we took last year to ensure stability during the downturn have proven successful, with significant cost reductions offsetting much of the revenue declines in our Television and Newspapers and Information Services segments. The economies in which we do business are clearly in better shape than they were a year ago, and we have further positioned our operations to take advantage of the improvements we are seeing globally. We will continue to manage our businesses smartly and confidently under the security of a strong balance sheet."

REVIEW OF OPERATING RESULTS

As a result of a restructuring in the first quarter, the operating results of STAR...

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