News Corp. Tops Estimates, 'Well Positioned for Growth'
News Corp. is "well positioned for growth" despite "significant challenges due to economic headwinds," COO Chase Carey said Tuesday, shortly after the media company reported better-than-expected quarterly results.
Earnings blew past expectations, coming in at 43 cents per share, a nickel better than Wall Street projections, and up from 32 cents a year ago. Revenue came in just a hair light of expectations: $8.14 billion, up 2 percent over last year. (Read More: News Corp. Beats Street's Earnings Forecast.)
No surprise, the results included a $67 million charge 'related to the costs of the ongoing investigations initiated upon the closer of The News of the World," up from a $17 million charge a year earlier. (Read More: News Corp. Cuts Murdoch's 2012 Bonus, Citing Scandal.)
News Corp. reiterated its fiscal 2013 projection of operating income in the "high single to low double-digit" percentage range over fiscal 2012.
Carey revealed that advertising markets have been mixed, with political ad spending exceeding expectations, while national advertising has fallen short.
Looking forward, he said post-election advertising is tracking up in the "mid-single digits," with national cable advertising stronger than national broadcast. As to economic weakness, Carey says it's hitting Sky Italia and the company's Australian publishing assets particularly hard.
Digital distribution played a starring role in the earnings call, sparking a couple of questions.
Digital revenue continues to be a net positive for the film division, and Carey said he's confident that it will enable the company to rebuild its home entertainment business to compensate for DVD declines.
But digital is a more complicated issue when it comes to television. Sports deals are important for must-see live TV, Carey said, though he acknowledged the move away from appointment viewing. Still, Carey stressed the upside, saying the "ability to access content whenever, wherever you want, makes it more valuable," and he stressed the value of linear networks as "important launching pads."
But throughout the question and answer period with analysts, Carey stressed the work that needs to be done to make money on shifting viewership patterns. He said he's frustrated with the slow implementation of TV Everywhere, and he said "we need to figure out things like dynamic ad insertion to make advertising more valuable."
However, he noted repeatedly that the company has "a lot going on in this area," with everything from new TV Everywhere deals to Hulu plus, but it certainly sounds like a work in progress.
With the spin-off of News Corp's publishing and education division scheduled for next year, the company didn't reveal any more details of the plan. (Read More: News Corp. Confirms Plan to Split in Two.)
The company teased ahead to Joel Klein's appearance at the UBS Media conference in December, saying he'd reveal more details then. For now, the publishing business continues to weigh on results, suffering from "lower ad revenues across all divisions."
—By CNBC's Julia Boorstin
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