News Corp Net Soars On Tv Success

Rupert Murdoch's global media and entertainment group News Corp said on Thursday its net profit for the half year to December 31, 1997 was boosted by a strong performance from its U.S. Fox television operations.

News Corp reported a net profit after abnormals of US$639 million up from US$543 million in the previous corresponding period. News said revenues grew in U.S. dollar terms by 14.8 per cent to US$6.38 billion from US$5.56 billion.

In Australian dollar terms, News said its net profit after abnormals was A$895 million, about A$60 million above marketexpectations.

After spending most the day languishing with the broader market, News Corp shares closed 2.44 per cent up at A$9.24 as investors digested the strong result and positive outlook.

 

These results were driven by particularly strong performance at the company's U.S. television and free standing inserts businesses, News said in a statement.

Part of this growth comes from earnings of assets acquired over the past 12 months and the strengthening of the U.S. dollar, News said. About 73 percent of News Corp's revenues come from the United States.

News said Fox television, which boasts highly successful programmes like The Simpsons, King of the Hill and The X-Files, led its strong U.S. performance, with operating profits up 72 percent on revenue gains of 27 percent in U.S. dollar terms.

This reflects very strong performance at the Fox Television Station Group, partially offset by startup losses at the Fox News Channel, News said.

The group is benefiting from higher ratings at FBC (Fox Broadcasting Co.), individual market share gains and an overall healthy advertising environment, it said.

However, News said that while the results were solid, its film earnings were down against last year, which saw the blockbuster film Independence Day boost 1996/97 results.

Film generated A$144 million for the half, down from A$202 million in the same half a year earlier. However, analysts expected this to turnaround in the second half of 1997/98.

News cited its film successes as British comedy

The Full Monty, which is now Britain's top selling film of all time, and its first animated feature Anastasia.

It said this year's blockbuster film Titanic was not included in the first half results, but would show in the second half. To date Titanic has generated over US$600 million in worldwide box office receipts and now stands as the seventh-highest grossing film in history.

After a telephone conference call with Murdoch on Thursday, media analysts said they were confident of a good second half result for News Corp due to the success of Titanic.

He mentioned they could make maybe US$100 million on it (Titanic) if it continues going at the same strength over the next couple of years, a Melbourne based media analyst said.

In Britain, News said its newspapers reported a 10 per cent increase in operating profits for the six months, with The

Times maintaining circulation in excess of 800,000 copies a day and The Sun declining slightly to 3.7 million copies a day.

News' Australian newspaper operations, which include The Australian and The Daily Telegraph, reported a 16 percent rise in operating profits.

However, News' Asian satellite television broadcaster STAR TV continued to lose money. Analysts said the Asian currency crisis had hit STAR TV operations in Indonesia, but overall the business was holding up well across Asia.

Maggie Urry in London and William Hall in Zurich

Nestl