NEWSCORPRupert Murdoch singled out Fox Filmed Entertainment Group’s mega-blockbuster Avatar for praise today when his News Corp reported its greatly improved 2nd-quarter earnings. “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,” he said in a statement. “I have every confidence that News Corporation is entering a new period of sustained growth.” And the bulk of the Avatar box office isn’t even included in this quarter since it came out on December 18th. But the film’s launch costs are. (Previously, News Corp’s 2nd biggest shareholder said publicly that Avatar would “add $400M to News Corp’s bottom line…”)

As the first of the Big Media companies to report earnings, there were encouraging signs, especially the improvement in the  advertising climate, which bodes well for the media sector in general. News Corp saw growth in earnings and revenue in its filmed entertainment and television and cable television business. The company reported 2nd-quarter total revenue growth of 10% to $8.7 billionas a result of double-digit percentage growth at the majority of business segments as compared to the same period a year ago.

Excluding a one-time $500 million pre-tax charge (related to the settlement of litigation filed against the Company’s Integrated Marketing Services business), News Corp reported total segment operating income of $1.2 billion. That was an increase of 44% compared with segment operating income of $839 million reported a year ago. These results reflected growth at the Filmed Entertainment, Television, Cable Network Programming, Newspapers and Information Services and Book Publishing segments, partially offset by decreases at the Direct Broadcast Satellite Television and other segments, the company stated.

“Our strong top-line revenue growth demonstrates that News Corporation is emerging from this recession with renewed vigor and strength,” News Corp chairman and CEO Rupert Murdoch said in a statement. “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.”

Following are results for Filmed Entertainment, TV, Cable TV, and Book Publishing:

Filmed Entertainment
The Filmed Entertainment segment reported fiscal 2-Q segment operating income of $324M, nearly tripling the $112M reported in the same period a year ago. Helping were several worldwide home 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. The current quarter film results also include launch costs for the successful worldwide theatrical release of Avatar and Alvin and the Chipmunks: The Squeakuel.

The Television segment reported 2-Q segment operating income of $29M, compared to the segment operating loss of $2M reported the same period a year ago. The improved results reflect increased contributions from the Fox Television Stations (FTS) and reduced losses at MyNetworkTV which were partially offset by lower contributions from FOX Broadcasting Company. FOX Broadcasting Company’s 2-Q results were lower due to higher programming costs driven by increased license fees for returning series and sports that more than offset higher advertising revenue.

FTS’ 2-Q operating income increased 19% from the same period a year ago, reflecting improved overall local advertising trends, particularly in the telecom and retail sectors, and increased advertising during the Major League Baseball American League Championship Series and World Series. These increases were achieved despite lower comparative advertising revenue. FTS achieved record market share for the fiscal 2-Q, with FTS revenues up 6% for the quarter compared to estimated market declines of approximately 2%.

Cable Network Programming
Cable Network Programming reported  segment operating income of $604M, an increase of $156M over the 2-Q a year ago. The 35% growth primarily reflects increased contributions from FOX News Channel (FNC), the Regional Sports Networks (RSNs), the Fox International Channels and STAR. FNC achieved its highest ever quarterly profit and increased its operating income 51% versus the 2-Q a year ago primarily from affiliate revenue rate increases. During the quarter, viewership at FNC was 197% greater than its nearest competitor in primetime and 136% higher on a 24-hour basis, reflecting FNC’s broadcasting the top 13 shows in cable news. At the company’s other cable channels, operating profit increased 28% from the prior year’s 2-Q results. Higher contributions at the RSNs were primarily the result of increased affiliate revenues. Increased contributions from the Fox International Channels were driven by affiliate and advertising revenue growth in Europe and Latin America. STAR’s 2-Q operating results improved versus the same quarter a year ago on advertising revenue gains.

Book Publishing
HarperCollins operating income of $65M increased almost threefold compared to the same period a year ago due to higher sales at the General and the Children’s Book divisions which were partially offset by higher royalty and manufacturing costs. 2-Q results included strong sales of Going Rogue by Sarah Palin, Where the Wild Things Are by Maurice Sendak, and The Vampire Diaries by L.J. Smith. During the quarter, HarperCollins had 48 books on The New York Times bestseller list, including seven titles that reached the No. 1 spot.