Film a bright spot in flat News Corp. quarter

PHYSICAL: Murdoch 'encouraged' by Fox's summer movie slate

By Susanne Ault -- Video Business, 5/6/2009

MAY 6 | PHYSICAL: Although film was a bright spot, News Corp. posted mixed results for its fiscal 2009 third quarter, suffering falling overall revenue but gains within its Fox studio division.

The film division’s operating income lifted 8% to $282 million. That strength was partly driven by impressive theatrical results for Marley & Me and Taken, which collectively generated $450 million in worldwide box office. This year’s Oscar best picture winner, Slumdog Millionaire, also was highlighted for its $140 million in U.S. grosses.

Slumdog Millionaire and Marley & Me bowed on DVD and Blu-ray on March 31. Taken will bow May 12.

Despite those gains, the company recorded $2.7 billion in net income for the three months ended March 31, which is flat with its performance the same time last year.

Revenue fell about 16% to $7.4 billion in the quarter, mostly due to big declines at its Fox TV network as well as its newspaper division.

“Our third-quarter results directly reflect the continuing weakness of the global economic climate,” News Corp chairman/CEO Rupert Murdoch said. “Despite this tough environment, we have proven resilient in several key areas this quarter. … Filmed entertainment saw an earnings increase in the same period, and I am encouraged by our upcoming slate of movies this summer.”

The company's X-Men Origins: Wolverine grossed $87 million in its first weekend at the box office.

However, falling advertising, coinciding with the current recession, significantly weakened other News Corp. businesses, such as TV, print and the Web.

Operating income for its TV segment and newspaper division slipped nearly 100% to $4 million and $7 million, respectively.

News Corp.’s Fox Interactive Media unit, which holds MySpace, reported an $89 million operating loss in the quarter. That compares with a $7 million operating loss last year.