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News Corp. posts 2Q drop
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February 9, 2000: 6:54 p.m. ET
Media group matches estimates, despite sinking 26% from a 'Titanic' year ago
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NEW YORK (CNNfn) - News Corporation Ltd. Wednesday posted a 26 percent drop in operating income for its fiscal second quarter, but the Australian media giant still matched analysts' forecasts.
News Corp., which is controlled by Rupert Murdoch and is parent of Fox television, reported earnings excluding one-time items of $252 million, or 25 cents per American depositary receipt, down from $339 million, or 34 cents per ADR, a year earlier.
Revenue for the quarter fell to $3.9 billion from $4.1 billion a year ago.
News Corp. tallied double-digit revenue gains in its television and publishing businesses, but its filmed entertainment division suffered a drop in revenue from a year ago, when video sales of the record-setting movie "Titanic" were still contributing to its bottom line.
"For the second consecutive quarter, all of our primary content businesses, with the exception of film, generated double-digit growth," said Murdoch in a statement. "Television, newspapers, cable programming and book publishing all posted sharp operating income increases."
News Corp. said "disappointing results" from the recently released film "Anna and the King" were partly to blame for a drop in operating income at its filmed entertainment division to $31 million, compared to earnings of $162 million a year earlier.
Operating profit from its U.S. television operation rose 32 percent to $221 million, and operating earnings from its newspaper division - which publishes the New York Post and Britain's Sun - rose 28 percent to $149 million.
Fox tops target but revenue falls
Separately, Fox Entertainment Group Inc., News Corp.'s 83-percent-owned subsidiary, reported Wednesday that its second-quarter earnings fell 10 percent, easily topping analysts' forecasts, despite a drop in revenue.
New York-based Fox, which broadcasts programs such as TV's "Ally McBeal" and "The X-Files," reported second-quarter net earnings of $94 million, or 13 cents a diluted share, compared with $105 million, or 17 cents a share, a year earlier. The First Call's estimate was for 8 cents a share.
Revenue fell to $2.4 billion from $2.6 billion a year ago.
Asked during a conference call whether News Corp. has any plans to ink a deal along the lines of America Online Inc.'s $182 billion purchase of CNNfn parent Time Warner Inc., Peter Chernin, Fox's president and chief operating officer said his company has "nothing in the pipeline" of that magnitude.
Chernin noted that Fox looked at a deal with Chris Craft Inc., a television station operator said to be a takeover target, but that Fox "couldn't get our arms around it." He declined comment about whether Fox has any interest in a deal with Universal Studios, which is owned by Seagram Co.
Chernin also outlined aggressive plans for online expansion, and last quarter the company purchased a stake in the Internet-based health information provider Healtheon/WebMD for about $100 million.
Ahead of the reports, which came after the closing bell Wednesday, News Corp. (NWS: Research, Estimates) shares rose 2-13/16 to 57-7/8, while Fox (FOX: Research, Estimates) shares edged up 9/16 to 28-7/8. 
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