News Corp CEO Rupert Murdoch Trounces Earnings Expectations

News Corp's fiscal fourth quarter earnings beat analysts estimates, thanks to strong DVD sales, higher licensing fees for cable networks and the sale of the company's stake in Gemstar-TV Guide International .

Quarterly net income came in at 43 cents a share, up 27 percent from the year ago period, and 9 cents more per share than Wall Street Analysts expected. While revenue grew 17 percent over the year-ago quarter to $8.59 billion. These numbers were pretty much in line with what we've seen from the other media giants that reported earnings last week -- cable TV is still relatively strong but broadcast TV and local stations are really hurting from the advertising slowdown.

So what drove growth? The film division benefited from strong box office and DVD sales, with operating income more than doubling to $220 million. CEO Rupert Murdoch pointed out that all the doom and gloom about the decline of the DVD business seems to be overblown.

On the other end of the spectrum, the company's TV unit was weak, operating income falling 28 percent on weaker ad revenue in local and primetime advertising. But cable network affiliate fees drove that division's revenue up 26 percent on 10 percent higher operating profit. And despite the fact that newspaper advertising is particularly weak right now, the company's Australian newspaper group showed higher ad sales and the division now includes Dow Jones, acquired last year.

Looking forward, Murdoch was quite wary, saying the company faces "more challenging macroeconomic conditions" for the company's current fiscal year it started a month ago. But he was also very optimistic about certain areas of international growth. Sky Italia reported a dramatic increase in subscribers, helping the satellite TV company grow operating income 37 percent over the year-earlier quarter. And earlier this week Murdoch announced a $100 million investment in local Indian TV stations. But considering his overall restraint, it'll be interesting to see how optimistic Wall Street is after this news.

Fox Interactive Media showed a $69 million profit, compared to a year-ago loss, on a 7.8 percent increase in revenues. And the division elicited some interesting comments on the conference call. Peter Chernin, News Corp's COO and President said the company plans to be "opportunistic" about MySpace.

Chernin was also very proud of Hulu.com, the content delivery site and system News Corp owns with CNBC's parent NBC Universal. When asked if the company is concerned about Hulu being competitive with Fox's own Chernin said Hulu is not competitive with broadcast networks, but rather he says it's replacing something that has gone away -- TV reruns. He says that Hulu has allowed the company to replace the rerun revenue that has gone away. Though certainly that revenue hasn't replaced TV syndication revenues, that's an interesting point, and you can bet they're hoping those digital revenues will continue to grow.

Video: CNBC's Julia Boorstin has analysis of News Corp's earnings.

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