Soaring Profits for Rupert Murdoch’s News Corp Despite Hacking Scandal
Hit television series in the United States and record global gross collected by Fox-produced movies in the final months of 2011 delivered the good for News Corp in the last quarter amidst the controversies in the United Kingdom and its dwindling revenues coming from its Australian media operations.
Overall net income in the last quarter of the past year reached $1.67 billion while profit was pushed up by 65 percent to $984.49 million, coming from the $596.27 million realised in the same period from the previous year.
In the process, News Corp said that it registered earnings before interest and tax (EBIT) of $1.39 billion in the period, improving by 16 percent from the results seen in the same period of 2010.
Both the company's television and movie investments returned rosy figures, with the divisions combining operating income of $540.5 million, with the latter getting the upper-hand at $365 million.
News Corp's movie issues, through 20th Century Fox, include the latest edition of the Alvin and the Chipmunks film series that lured moviegoers around the world during the holiday season.
Fox's TV hits also shored up News Corp's televisions earning, which was largely headlined by the reality talent show 'The X Factor', bannered by creator and producer Simon Cowell, previously known as hard-hitting 'American Idol' judge.
The company's publishing side, however, has been a let down, posting operational income retreats of up to $202.47 million.
News Corp officials blamed the usual suspect - the declining newspaper subscription faced by new publishers around the world, which in turn discourages the inflow of advertising revenues.
Analysts have been harping about the inevitable migration to digital media, which triggered the plunging income of global newspaper, but News Corp said that it had implemented the necessary infrastructure for its contents to reach the millions surfing the web for news updates.
Close to $34 million were spent to make the switch, News Corp said, which allowed for the company's British and Australian publications to be read worldwide either by free and paid subscriptions.
Also, News Corp highlighted the gains achieved by its cable division from October through the end of December, with its operation income jumping by 20 percent in the period to $819 million, the best performing so far of the global media firm owned and operated Rupert Murdoch.
"News Corporation's commitment to delivering value to our stockholders is unwavering and we will continue to focus on generating superior shareholder returns, as evidenced by our strong year-to-date earnings and the successful completion of over half of our previously announced share repurchase program," The Herald Sun reported Murdoch as saying in a statement.
"I am particularly pleased with the success of our business strategies in spite of the uncertain economic conditions that we continue to face," the company chair and CEO added.
The biggest challenge so far is the hacking scandal that resulted to the closing of the more than century-old 'News of the World', the impact of which remains to be seen though analysts have already forecasted probable hits on the company's upcoming results.
Already, News Corp admitted that it had shelled out some $104 million that were mostly used to defend the media firm, with 15 percent of the amount paid out to claims lodged by hacking victims, according to Reuters.