Rupert Murdoch's News Corp. is preparing to split into two entities, and the company's fiscal third-quarter financials illustrated why: Its cable television and film properties continue to flex their muscles while the publishing unit's profit exhibited atrophy.
For the quarter ended March 31, News Corp. earned $2.85 billion, or $1.22 a share, compared with $937 million, or 38 cents a share, in the year earlier period.
Revenue for the quarter increased 14% to $9.54 billion, beating Wall Street estimates.
The increases primarily came from higher carriage fees for Fox's television channels as well as the inclusion of revenue from German pay-TV operator Sky Deutschland, which News Corp. now controls.
"We believe we are in incredibly strong position on many fronts," News Corp. Chief Operating Officer Chase Carey told analysts Wednesday afternoon.
Cable television, including Fox's cluster of regional sports networks, Fox News Channel and entertainment channels FX and National Geographic channels, continued to be the company's stand-out performers. Cable channels now contribute 70% of News Corp.'s operating income, Carey said.
Cable television generated $2.8 billion in revenue and $993 million in operating income, an increase of 17% over the year earlier period.
Broadcast television, which suffered through a bruising three months due to steep declines in "American Idol" ratings, was boosted by fees charged distributors to retransmit the Fox Broadcasting signal.
Broadcast television contributed $1.23 billion in revenue, an increase of 1.4% and operating income of $196 million, an increase of 14.6%.
Filmed entertainment, the company's second-largest unit, generated 17% higher revenue, rising to $2 billion. The division posted $289 million in operating income, an increase of 6.3%. The company benefited from the home entertainment releases of "Life of Pi," "Taken 2" and "Ice Age: Continental Drift."
But the publishing business, which includes the Wall Street Journal and HarperCollins book publishing, saw revenue fall 4.2% to $1.9 billion. Operating income plummeted nearly 35% to $85 million.
While British newspapers brought in more revenue, helped by the Sunday edition of the Sun, the ailing Australian economy crimped profits from down under.
Meanwhile, restive shareholders renewed calls on Wednesday for a diminishment of Murdoch's role at the company.
Longtime critics of News Corp., the Christian Bros. Investment Services and the British Columbia Investment Management Corp. in Canada, said they had lodged a joint shareholder proposal calling for an independent chairman, rather than the 82-year-old Murdoch, to oversee News Corp.'s board.
The Nathan Cummings Foundation also urged the elimination of the company's dual-class stock structure, which allows Murdoch to control the company through his holdings of 38% of the vote shares. The family's voice is unduly disproportionate, the foundation said, noting that Murdoch and his family's economic interest in News Corp. is a much smaller 14%.