Regional sports networks, FX and a strong film slate delivered a robust fiscal third quarter for News Corp., which generated $9.54 billion in revenue during the first three months of the year. That bests what analysts projected by $0.34 billion and its tally from a year before by more than $1 billion.
News Corp. profits were even with what analysts had expected, as the company posted adjusted earnings per share of $0.36. Net income rose from $937 million to $2.85 billion, or $1.22 per share. The conglomerate's cable division continued to anchor its financial performance, as cable network programming profits rose by $147 million and revenue rose by $407 million.
According to the company's Wednesday release, most of that growth is thanks to News Corp.'s regional sports networks and FX, the cable channel that airs shows like "Sons of Anarchy" and "Louie." In particular, higher affiliate fees offset increases in cost.
The continued growth in revenue from RSNs and FX helps explain why News Corp. is launching Fox Sports One, a new national sports network, and FXX, a new cable channel similar to FX.
News Corp.'s film division also had a strong third quarter thanks to theatrical grosses from "Life of Pi" and the home entertainment performance of "Taken 2" and "Ice Age: Continental Drift." Operating income rose $17 million to $289 million for the quarter while revenue grew almost $300 million to $2 billion.
"In our fiscal third quarter News Corp. achieved organic growth across our cable, film and television segments and, through the consolidation of Sky Deutschland and sale of stakes in SKY New Zealand and Phoenix Satellite Television, we advanced our strategic agenda to simplify our global portfolio," News Corp. Chairman and CEO Rupert Murdoch said in a statement. "We also announced our plans to broaden our core cable business with the unveiling of our national sports channel Fox Sports 1 and our third branded FX channel, FXX. Both initiatives underscore our strategy of maximizing existing assets and leadership positions to drive sustainable growth and long-term value."
The lone drags on News Corp.'s earnings were its direct broadcast satellite television division and losses from its education business and continued charges from the UK phone hacking scandal. News Corp. has reported losses stemming from that scandal ever it since it broke out two years ago, and this quarter ongoing investigations cost them $42 million.
News Corp. will soon split off its publishing division as a separate company while renaming its entertainment-focused conglomerate 21st Century Fox.
"We are on target to complete the proposed separation of our businesses near the end of our fiscal year," Murdoch said in a statement. As we prepare to launch two new industry leaders with new News Corporation and 21st Century Fox, I am more confident than ever of the long-term value the separation will unlock for the Company and its shareholders."