As News Corp.'s
Revenues increased a modest 4% to $5.9 billion, and operating income declined 6% to $851 million. Adjusting the earnings for an accounting change that occurred in the previous year's quarter (News Corp. took a hit last year of more than $1 billion, pulling the company down to a net loss), net profit increased 45% to $843 million. On a combined basis, net income increased 47% to $0.28 per diluted share -- and again, the accounting change is excluded in this comparison.
One of the negative aspects of the quarter can be found in the studio segment, which suffered some tough comparisons. In the previous year's quarter, movies such as Robots and Alien vs. Predator helped to drive results as they made their way through ancillary distribution channels; Twentieth Century Fox Television also was strong, with robust performance from syndication products. News Corp. labeled this segment an unequivocal drag on operations -- it just didn't have the firepower to compete with its other businesses. The film studio's operating income declined 35%.
Don't fret, though, because better days are ahead. Remember that the company just released Marvel Entertainment's
So, the studio didn't do so hot. What about the rest of the conglomerate? Not bad at all in some areas. The television segment increased its operating income by 20%. Cable networks grew their profit by 26%. The jewel of the segment, Fox News Channel, saw flat performance in terms of income because of programming costs, but its viewer levels continue to rival those of its competitors. The satellite-television business narrowed its loss, the newspapers segment was about the same in terms of income, and book publishing saw a 21% decline in profit. Nevertheless, taken in total, News Corp. delivered a much better cash-flow scenario this quarter. Last year at this time, $497 million in operational cash flow was generated; this year, $716 million was booked, enough to cover capital expenditures and acquisitions.
News Corp. is a strong media player, able to compete with heavyweights such as Time Warner
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Fool contributor Steven Mallas owns shares of Disney and Marvel Entertainment. As of this writing, he was ranked 1,163 out of more than 12,000 investors in the Motley Fool CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.