News Corp. Looks Good on One-Time Items

Media

Published: November 6, 2012 4:38 pm

Last Updated: November 7, 2012 4:57 am

News Corp. (NASDAQ: NWSA) reported first fiscal quarter 2013 earnings after markets closed today. For the quarter, the media giant posted adjusted diluted earnings per share (EPS) of $0.43 on revenues of $8.14 billion. In the same period a year ago, the company reported an EPS loss of $0.32 on revenues of $7.96 billion.Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.38 and $8.16 billion in revenues.

On a GAAP basis, News Corp. posted EPS of $0.94, which included about $1.45 billion in pre-tax gains related primarily to the sale of the company’s NDS Group to Cisco Systems Inc. (NASDAQ: CSCO) and a share repurchase at British Sky Broadcasting (BSkyB). Operating income totaled $1.378 billion, slightly less than the $1.385 billion posted in the same period a year ago.

The company’s CEO said:

Even against considerable currency headwinds due to a stronger dollar, we were able to increase News Corp’s revenue and adjusted segment operating profit over the prior year quarter while continuing to make key investments to position us for future growth.

The company’s operating revenue jumped 23% in its cable network programming segment, to $953 million, of which 33% came from domestic channels. Currency exchange rates cut the company’s international earnings by 7%. Advertising revenue grew 8% in the domestic market and 1% on a constant-currency basis internationally.

Satellite television operating income fell to $23 million, including $70 million in costs for Olympics broadcast rights for SKY Italia. Publishing operating income fell nearly 50% to $57 million. Operating income also grew at the company’s filmed entertainment and television segments.

News Corp. continues to pursue a previously announced tax-free separation of its publishing businesses, education division, and Australian assets from the company’s media and entertainment businesses. The split is expected to happen around the end of June next year.

The company did not provide further guidance, but the consensus estimate for the current quarter calls for EPS of $0.45 on revenues of $9.25 billion. For the fiscal year ending in June 2013, the company is expected to post EPS of $1.66 on revenues of $34.96 billion.

The company’s shares are up about 3% in after-hours trading today, at $25.00 in a 52-week range of $15.93 to $25.50. The consensus target price for the shares was around $27.40 before today’s report.

Paul Ausick

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