News Corp Beats Forecasts on Strong Ads; Murdoch Sits Out Call

News Corp.'s headquarters in New York.
Mark Lennihan
News Corp.'s headquarters in New York.

A rebound in advertising and strong performance at News Corp's networks led the media giant to beat expectations.

Adjusted earnings came in at 29 cents per share, a penny higher than analysts expected and up from adjusted EPS of 25 cents a year ago.

Revenue also beat expectations and last year's results, at $8.76 billion, up from $6.84 billion a year ago.

The company maintained its 2011 projection for low double digit percentage operating income growth.

CEO Rupert Murdoch did not participate on the company's earnings call, which is surprising considering that earlier today he answered questions about his new iPad app, 'The Daily,' at its launch. News Corp's president and COO Chase Carey filled Murdoch's shoes, giving an overview of the company's business, and jumping in to answer questions. He explained that Murdoch is giving briefings on the Daily during the conference call.

There's no question, like Time Warner, News Corp's strongest assets are its cable networks, which generate nearly 60% of the company's total operating income. The unit showed nice growth over last year, with 17 percent higher ad sales and 11 percent higher affiliate fees. These numbers are even more impressive considering the one month blackout News Corp had with Dish Network, which cost $30 million.

Ad revenue is up pretty much across the board, driven higher by auto ads in particular. But lest Wall Street worry, he stressed that the the company is *not* too reliant on ads thanks to fees for both cable and also Fox broadcast channel — a new development. When pressed Carey wouldn't reveal exactly how much retransmission fees are worth, just saying "hundreds of millions of dollars."

Carey tried to put a positive spin on the company's struggles with MySpace, but failed to give any concrete info. He stressed that MySpace has now rebuilt the business with a new focus on entertainment and a new streamlined structure (i.e. tons of layoffs). Carey said thatl, "now's the time for MySpace to consider strategic options," and that it might make more sense for MySpace to reach its full potential under a new ownership structure. That doesn't give us any info on how close News Corp is to selling MySpace, and what it thinks it could get for the asset.

Questions? Comments?