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News Corp, Time Warner revenue, profit up on cable
February 3, 2011, Thursday
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NEWS Corp and Time Warner both posted higher revenue and profit in the December quarter, boosted by surging advertising revenue at their cable TV business units.
The companies benefited from a wider rebound in the advertising business and both said the outlook looked particularly promising for the year ahead.
Rupert Murdoch's News Corp, which owns broadcaster Fox and publishes newspapers including the Wall Street Journal and the UK's News of the World, said profit rose to 29 cents a share after adjusting for one-time charges primarily related to a restructuring of MySpace, its social networking business. That was a penny better than analysts' average forecast of profit of 28 cents a share, according to Thomson Reuters I/B/E/S.
News Corp said revenue was up by 1 percent to US$8.76 billion.
Operating income at its US cable networks -- including FX, National Geographic and Fox Sports -- rose by 16 percent, while operating profit at its international networks -- such as Star TV and Fox Deportes -- jumped by 37 percent.
News Corp Chief Operating Officer Chase Carey said on a conference call that the cable networks business would perform even stronger in the second half of its fiscal year.
Carey also said the company is now considering its strategic options for MySpace following a restructuring of the business and a relaunch as a social entertainment site.
"We recognize that the plan to allow MySpace to reach its full potential may be best developed under a new ownership structure and we're evaluating those strategic alternatives."
When Murdoch bought MySpace in 2005 for US$580 million, it was widely seen as a visionary step forward for News Corp as a traditional media company adapting to an increasingly digital and social media business.
But after early success MySpace faltered badly and Murdoch has now turned his sights on Apple's iPad as a platform for the future. Earlier in the day, News Corp unveiled the Daily, a new electronic newspaper solely for tablets like the iPad.
Time Warner forecast better-than-expected 2011 earnings, pointing to the same surge in advertising sales for cable TV programs that powered its fourth-quarter results.
Alongside its earnings, Time Warner also raised its quarterly dividend by 11 percent and increased its stock buyback plan to US$5 billion.
Time Warner's soaring advertising revenue from its cable networks division, which includes CNN, TNT and TBS, highlighted a quarter in which overall revenue rose 8 percent and profit climbed 22 percent.
Both its profit and revenue surpassed expectations at a time when the media industry is undergoing radical change, facing threats from newer video services such as Netflix Inc and potentially Apple Inc and Google Inc.
"It's a sign of just how strong the cable advertising network market is," said Alan Gould, an analyst with Evercore Partners, who added it should bode well for other media companies like Viacom, Discovery Communications and Scripps Networks.
The companies benefited from a wider rebound in the advertising business and both said the outlook looked particularly promising for the year ahead.
Rupert Murdoch's News Corp, which owns broadcaster Fox and publishes newspapers including the Wall Street Journal and the UK's News of the World, said profit rose to 29 cents a share after adjusting for one-time charges primarily related to a restructuring of MySpace, its social networking business. That was a penny better than analysts' average forecast of profit of 28 cents a share, according to Thomson Reuters I/B/E/S.
News Corp said revenue was up by 1 percent to US$8.76 billion.
Operating income at its US cable networks -- including FX, National Geographic and Fox Sports -- rose by 16 percent, while operating profit at its international networks -- such as Star TV and Fox Deportes -- jumped by 37 percent.
News Corp Chief Operating Officer Chase Carey said on a conference call that the cable networks business would perform even stronger in the second half of its fiscal year.
Carey also said the company is now considering its strategic options for MySpace following a restructuring of the business and a relaunch as a social entertainment site.
"We recognize that the plan to allow MySpace to reach its full potential may be best developed under a new ownership structure and we're evaluating those strategic alternatives."
When Murdoch bought MySpace in 2005 for US$580 million, it was widely seen as a visionary step forward for News Corp as a traditional media company adapting to an increasingly digital and social media business.
But after early success MySpace faltered badly and Murdoch has now turned his sights on Apple's iPad as a platform for the future. Earlier in the day, News Corp unveiled the Daily, a new electronic newspaper solely for tablets like the iPad.
Time Warner forecast better-than-expected 2011 earnings, pointing to the same surge in advertising sales for cable TV programs that powered its fourth-quarter results.
Alongside its earnings, Time Warner also raised its quarterly dividend by 11 percent and increased its stock buyback plan to US$5 billion.
Time Warner's soaring advertising revenue from its cable networks division, which includes CNN, TNT and TBS, highlighted a quarter in which overall revenue rose 8 percent and profit climbed 22 percent.
Both its profit and revenue surpassed expectations at a time when the media industry is undergoing radical change, facing threats from newer video services such as Netflix Inc and potentially Apple Inc and Google Inc.
"It's a sign of just how strong the cable advertising network market is," said Alan Gould, an analyst with Evercore Partners, who added it should bode well for other media companies like Viacom, Discovery Communications and Scripps Networks.
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