Rupert Murdoch may still be struggling with News Corp.’s newspaper division as the hacking scandal racks up quite a bill, but his movie and TV studio and cable divisions are making gains.
Mark Lennihan
News Corp.'s headquarters in New York.
The media giant reported better than expected quarterly results Wednesday, and announced that it’s taking a $87 million charge “related to the costs of the ongoing investigations initiated upon the closure of "The News of the World."
Murdoch was not on the call, nor was his son James—COO Chase Carey has been taking an increasingly public role at the company while the family, and James in particular, takes a step out of the spotlight while it tries to put the hacking scandal behind it.
(Just Wednesday, News Corp. settled another 15 lawsuits by phone hacking victims — it’s now settled 54 out of 60 cases, paying $7.9 million).
Carey weighed in with some optimistic comments about growth potential. But the company warned that it’s “unable to reliably forecast” fees related to the News of the World scandal.
Excluding one-time items, News Corp. earned 39 cents per share in the second fiscal quarter, compared to the 34 cents analysts expected, and up from just 29 cents in the year-ago quarter. Revenue also inched up, but just slightly, to $8.98 billion, a hair above expectations.
News Corp.’s studio had quite a turnaround, more than doubling operating income to $393 million. 20th Century Fox didn’t have another record-breaking "Avatar," but it did benefit from the third movie in the "Alvin & the Chipmunks" franchise and break-out hit "The Descendants," plus strong home entertainment revenue.
And digital dollars are starting to add up. The company says it benefitted from licensing revenue from Netflix and Amazon and has recognized $200 million in revenue from these two digital buyers. Looking forward, Carey says he sees “long term growth potential in authentication” — getting consumers to log in to their cable or satellite tv subscription to access digital content.
So what’s the company going to do with its mountain of cash? Carey says he’s commited to the company’s buyback plan. As of now it’s already spent $2.7 billion-plus repurchasing shares.
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