News Corp's $254m profit boosted by Avatar
News Corp's $254m profit boosted by Avatar
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By Matt Hallam. |  |
Wednesday, 03, Feb 2010 11:27
By Sarah Garrod.
An increase in advertising revenues and the enormous success of multi-Oscar nominee Avatar has led to a rebound in News Corp profits.
The company reported second quarter net income of $254 million (£159 million), compared to a loss of $6.4 billion (£4 billion) for the same period last year.
Chief executive Rupert Murdoch said the result had been partly due to "prudent, creative risks", such as the backing of Avatar, which was produced by New Corp's 20th Century Fox film studio.
The film sector of News Corp reported fiscal second quarter segment operating income of $324 million (£202 million); nearly tripling the $112 million (£70 million) reported in the same period a year ago.
The company said the entertainment successes, including Ice Age: Dawn of the Dinosaurs, X-Men Origins:Wolverine and Night at the Museum: Battle of the Smithsonian, as well as the pay-TV performance of Taken, contributed to the success.
Avatar, which has surpassed Titanic as the highest grossing film of all time, has already garnered more than $2 billion (£1.25 billion) worldwide and remains the number one box office draw after seven weeks in release.
In the newspaper sector of the business, News Corp reported increased advertising revenues at The Wall Street Journal, as well as lower operating expenses. The UK newspaper group reported higher second quarter operating income contributions compared to the same quarter in 2008 due to "cost savings from lower promotional expenses and cost containment initiatives".
Mr Murdoch added: "Our strong top-line revenue growth demonstrates that News Corporation is emerging from this recession with renewed vigour and strength. Moreover, our underlying operating trends this quarter far outpace those of the same quarter last year. We continue to reap the benefits from the restructuring and cost containment measures we instituted before the downturn began and I am pleased that our unrelenting focus has translated to growth across our businesses that will reward stockholders for years to come.
"We have a strong management team that knows how to nurture our core
businesses, while taking prudent, creative risks like Avatar that lead the industry forward. I have every confidence that News Corporation is entering a new period of sustained growth."