Rupert Murdoch’s News Corp saw earnings growth slow to just 6% in the second quarter, according to the company’s latest report this morning.
The company said second quarter total segment operating income hit $US1.29 billion in the quarter, compared with $US712 million in the second quarter of 2009-10.
The 6% rise in operating income in the second quarter followed an 8% rise for the three months to September.
(http://www.newscorp.com/investor/download/NWS_Q2_2011.pdf) .
But that quarter’s result included a $US500 million litigation settlement charge at the Company’s integrated marketing services business, which reduced the real operating profit of $1.212 billion.
"Excluding this charge, second quarter segment operating profit increased 6% over the prior year, News said.
"This growth reflects significant profit increases at the Cable Network Programming and Television segments, partially offset by decreases at the Filmed Entertainment and Other segments," the company said.
"In the second quarter, the Company recorded a $275 million pre-tax charge for the impairment of goodwill related to the Digital Media Group and an organizational restructuring at MySpace.
"Including the impact of these charges, the Company reported second quarter net income of $642 million ($0.24 per share) compared with net income of $254 million ($0.10 per share) in the second quarter a year ago.
"Excluding the net income effects in both years of one-time items, principally consisting of charges related to impairment, restructuring and business dispositions, as well as the litigation settlement charge in the prior year, second quarter adjusted earnings per share this year are $0.29 compared with the adjusted year-ago result of $0.25, an increase of 16%," News said.
For the six months to December, 2010 operating income (including all the one off charges) rose just 7% to $US2.435 billion from $US2.274 billion in the six months to December 2009.
Revenue for the second quarter was $US8.761 billion, up from $US8.684 billion previously. For the half, revenue rose to $US16.187 billion from $US15.883 billion.
Meanwhile the big News Corp rival, Time Warner revealed much stronger second quarter earnings growth than News, thanks to the still recovering TV advertising market.
The New York-based media group said net income from continuing operations was $US769 million, up 26% from a year earlier.
Adjusted operating income, a commonly used profit metric for media companies, rose 14% to $US1.4 billion, topping News Corp’s figure.
Time Warner’s sales rose 8% to $7.8 billion, topping analysts’ forecasts of $US7.47 billion. (A smaller figure than News Corp).
For 2011, the media company expects the percentage of growth for its full-year earnings per share to be in the low teens.
The company raised its cash dividend by 11% to 94 cents a share and announced a $5 billion stock repurchase program.
Revenue at the company’s TV network division, which includes CNN and HBO, rose 14% in the quarter, led by a 21% jump in advertising sales and a 25% surge in content sales. Subscription revenues climbed 9%.
Sales at Time Warner’s film studio and TV production business, Warner Bros., rose 10% in the fourth quarter, which the company attributed to higher television license fees. But the gain wasn’t enough to offset a decline in home video revenues, which caused income to slip 5% at the division.
For the full year, Time Warner said revenues at its film division rose 5%, helped by the success of hit releases including "Harry Potter and the Deathly Hallows: Part 1", "Inception" and "Clash of the Titans".
The company’s publishing branch, Time Inc., continued to lag in the quarter, with revenue dropping 4%. That included a 1% decline in advertising sales, a 7% decrease in subscription sales and a 13% slide in other revenue.
