UPDATE, 2:35 PM: The comment about James came from News Corp president Chase Carey, filling in for Rupert Murdoch, who wasn’t on the quarterly conference call with analysts and reporters. Despite growing concerns about James’ role in the News Of The World hacking scandal, the deputy COO “has done a good job and we are not contemplating any changes,” Carey said. He added, in response to a question, that the company is taking “seriously” the strong opposition that several shareholders expressed at the recent annual meeting to many members of the News Corp board — which includes three members of the Murdoch family. “The board will, and is, discussing those votes,” he says. “The board continues to evolve. …. That being said, we’re proud of the board.”
In other matters, Carey says that “we’re not buying the (Los Angeles) Dodgers,” but didn’t elaborate. Sports costs are not a big concern for the company for now because “outside of Los Angeles, most of our contracts are long term,” he says. He’s also unfazed by the NBA strike, saying that “it’s not a significant financial event for us” although “we’d like to see them settle it.” Carey denied that Fox is offering make-goods ads for lower-than-expected initial ratings for The X Factor: “We have the No. 1 show and make real money from it,” he says. “It came out a bit below where we targeted … but is building momentum.” Not much detail about the collapse of the auction for Hulu. Carey says that it “has been a positive for us in terms of creating value” despite its “complicated ownership structure.” Carey also didn’t provide much insight into the new programming deal with DirecTV, although he says it’s “fair for both of us.”
PREVIOUS, 1:11 PM: What’s more important to News Corp: The News Of The World hacking scandal, or Rise Of The Planet Of The Apes? Today, it’s the chimps. The film contributed to a strong fiscal 1Q that beat most expectations, although some one-time charges hit the bottom line. With the charges, the entertainment giant reported net income of $738M, down 4.8% vs the period last year, on revenues of $8B, up 7%. Operating profits, without the charges, rose 21% to $1.39B. Earnings per share came in at 28 cents, slightly below the 29 cents analysts expected — but, again, without the charges the figure would be 32 cents. The charges include a $91M writedown charge from the U.K. newspaper business, which probably means it’s tied to the closing of NOTW. Operating income at the cable networks was up 18% to $775M, due to improvements at channels including FX and Fox News and pick up in affiliate fees and ad sales. The filmed entertainment unit’s operating profit rose 24% to $347M, helped by Apes and home videos of Rio and X-Men: First Class. The television operation’s operations rose 27% to $133M — with new retransmission consent revenues outweighing additional marketing costs for Terra Nova, The New Girl, and X-Factor. Publishing was the laggard, with operations down 38% to $110M due to the NOTW closure and lower ad sales in Australia.
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