News Corp., parent of the Fox TV network, Fox News Channel and FX cable network, posted net income of $275 million for the third fiscal quarter ended March 31, up from a loss of $3.99 billion in the year-ago period. The 2002 loss was due to a $4.1 billion write-down of News Corp.'s investment in Gemstar-TV Guide International. Revenues rose 14% to $4.39 billion, from $3.85 billion in 2002, led by rising film and TV revenue.
TV revenue up
TV revenue rose 10.3% for the quarter, in spite of a hard comparison to the year-ago quarter, when Fox TV broadcast the Super Bowl, and "substantial preemptions" during the recent war in Iraq, Chief Financial officer David DeVoe said. Chairman Rupert Murdoch added that the war's impact on the company totaled approximately $20 million, including costs for covering the war and lost advertising from program preemptions.
The TV operations also faced higher marketing spending to promote mid-season replacement shows, but were helped by higher ratings at Fox TV, led by the success of reality shows American Idol and Joe Millionaire, and at its cable channels. Mr. DeVoe noted Fox News Channel ad sales rose approximately 15% during the quarter, thanks to higher ratings for its war coverage.
Newspaper operations, which include the New York Post and The Sun and The Times in the U.K., also showed improvement during the quarter, but advertising gains were offset by circulation revenue drops in the U.K.
All News Corp. divisions are projecting growth in 2003, but remain cautious due to the economic landscape, Mr. DeVoe said.
The Fox network is in a stronger position during the current upfront ad selling marketplace, with higher ratings and fewer holes to fill in its schedule, said the network's president and chief operating officer, Chernin. He would not expand on his outlook in advance of Fox's upfront presentation Thursday, but said the company is encouraged by its ratings success.
"We're in as good a position as any network to play this market," he said.