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News Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 9, 2012 06:58AM

News Corp. (NWS) filed Quarterly Report for the period ended 2011-12-31. News Corp. has a market cap of $50.89 billion; its shares were traded at around $20.21 with a P/E ratio of 16.7 and P/S ratio of 1.5. The dividend yield of News Corp. stocks is 0.9%.



Highlight of Business Operations:

For the three and six months ended December 31, 2011, revenues at the Cable Network Programming segment increased $187 million, or 9%, and $435 million, or 11%, respectively, as compared to the corresponding periods of fiscal 2011, primarily due to higher net affiliate and advertising revenues. Domestic net affiliate revenues increased 9% for both the three and six months ended December 31, 2011, primarily due to increases at the RSNs and FX. Domestic advertising revenues increased 6% and 9% for the three and six months ended December 31, 2011, respectively, primarily due to increases at FX and FOX News. Also contributing to these increases in net affiliate and advertising revenues was the positive impact from the absence of the carriage agreement renewal disputes included in the corresponding periods of fiscal 2011, which resulted in a loss of revenue of approximately $30 million. For the three and six months ended December 31, 2011, international net affiliate revenues increased 19% and 21%, respectively, and international advertising revenues increased 5% and 13%, respectively, primarily due to increases at FIC in Latin America.

For the three and six months ended December 31, 2011, operating income at the Cable Network Programming segment increased $147 million, or 20%, and $263 million, or 19%, respectively, as compared to the corresponding periods of fiscal 2011. The fiscal 2012 periods included a net benefit of approximately $55 million due to the NBA lockout primarily due to reduced rights costs. Also contributing to the operating income increases were the revenue increases noted above, partially offset by $40 million and $172 million increases in expenses, respectively, due to higher entertainment programming costs.

For the three and six months ended December 31, 2011, revenues at the Filmed Entertainment segment increased $254 million, or 14%, and $529 million, or 16%, respectively, as compared to the corresponding periods of fiscal 2011. The revenue increases were primarily due to the inclusion of revenues from Shine which was acquired in fiscal 2011 and approximately $200 million in digital distribution revenues from the licensing of the Company’s television content. Also contributing to the revenue increase for the six months ended December 31, 2011 was higher licensing revenues from Avatar. The revenue increases were partially offset by decreased home entertainment and worldwide theatrical revenues. The three and six months ended December 31, 2011 included the worldwide theatrical and home entertainment success of Rise of the Planet of the Apes and the home entertainment success of Rio and X-Men: First Class as compared to the corresponding fiscal 2011 periods which included the home entertainment and pay television performances of Avatar and the worldwide theatrical success of The Chronicles of Narnia: Voyage of the Dawn Treader, Unstoppable and Knight & Day.

For the three and six months ended December 31, 2011, revenues at the Publishing segment decreased $216 million, or 9%, and $193 million, or 4%, respectively, as compared to the corresponding periods of fiscal 2011, primarily due to decreases at the Company’s newspaper businesses. The decreases at the Company’s newspaper businesses were primarily due to lower revenues in the U.K. principally resulting from the shutdown of The News of the World in July 2011 and lower advertising revenues at the Australian newspapers. Also contributing to the revenue declines were lower advertising revenues at the integrated marketing services business resulting from lower volume of in-store marketing products. The decrease in revenues during the six months ended December 31, 2011 was partially offset by higher advertising and circulation revenues at The Wall Street Journal. The weakening of the U.S. dollar against local currencies, primarily the Australian dollar, resulted in revenue increases of approximately $46 million and $135 million for the three and six months ended December 31, 2011, respectively, as compared to the corresponding periods of fiscal 2011.

For the three and six months ended December 31, 2011, operating income at the Publishing segment decreased $162 million, or 43%, and $230 million, or 41%, respectively, as compared to the corresponding periods of fiscal 2011. The decreases in operating income for the three and six months ended December 31, 2011 were primarily due to the lower revenues noted above. The weakening of the U.S. dollar against local currencies, primarily the Australian Dollar, resulted in operating income increases of approximately $7 million and $14 million for the three and six months ended December 31, 2011, respectively, as compared to the corresponding periods of fiscal 2011.

Read the The complete Report



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