As News Corp reported third quarter operating profit of $1.06bn it said that advertising revenues were down at its newspapers in Australia and the UK.
The owner of The Times titles, The Sun and the News of the World reported overall operating income down $207m year on year largely as a result of the exceptional performance of the film Avatar last year which was produced by News Corp’s Fox film division.
In the publishing division – which includes News Corp’s newspaper assets – operating income (or profit) dropped to $36m in the three months to the end of March, compared with $207m a year ago.
This was largely due to a $125m litigation settlement charge at the Integrated Marketing Services business. The other $82m drop was said be driven by: advertising revenue declines at the Australian and UK newspaper businesses, costs related to the launch of iPad-only daily news magazine The Daily (said to have cost $30m when it launched in February) and reduced income following the sale of the Dow Jones Index business in March 2010.
Today’s figures for the third quarter of News Corp’s financial year contrast with a much stronger performance for its publishing division in the first quarter – six months ago.
Back then, it reported advertising revenues for newspaper titles up 13 per cent year on year with gains around the world. Then it made $178m in the publishing division, compared with $118m in the same period a year earlier.
Cable TV was News Corp’s biggest profit generator in this last quarter, delivering operating income of $735m followed by filmed entertainment ($248m), television ($192m) and then publishing ($36m).
In “other” News Corp reported a loss in the quarter of $165m, mainly due to social networking business Myspace.
News Corp’s 39 per cent stake in BSkyB delivered it $108m of operating income in the third quarter. It is currently in the midst of trying to gain regulatory approval for buying the rest of BSkyB.