News Corp. Earnings Cheat Sheet: Avatar Boost Fading, Revenues Dip

S&P 500 (NYSE:SPY) component News Corporation (NASDAQ:NWSA) reported its results for the third quarter. News Corp. is a global media company with operations in film, television, cable programming, satellite television, magazines and book publishing.

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News Earnings Cheat Sheet for the Third Quarter

Results: Net income for the entertainment company fell to $639 million (24 cents/share) vs. $839 million (32 cents/share) a year earlier. A decline of 23.8% from the year earlier quarter.

Revenue: Fell 6% to $8.26 billion YoY.

Actual vs. Wall St. Expectations: NWSA fell short of the mean analyst estimate of 27 cents/share. Estimates ranged from 26 cents per share to 33 cents per share.

Quoting Management: Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said: “As we anticipated, News Corporation’s third quarter financial results faced challenging comparisons when set against last year’s record Avatar contribution at our Filmed Entertainment business. However, the great response to Rio and our confidence in our upcoming releases, indicate that the difficult comparisons in this segment over the past nine months are now behind us. Looking beyond our film business, I am delighted with the continued and significant operational momentum of our channels businesses, with their market-leading positions across the globe. I’m particularly pleased that our Television segment, viewed by the market just one year ago as a challenged business, more than quadrupled its earnings contributions over the prior year quarter on the strength of the national advertising market, increased retransmission consent revenues, and the popularity of our programming. And our largest earnings generator, Cable Networks, increased earnings 25% on 13% revenue growth. I fully expect these vibrant businesses to continue driving future profit growth for News Corporation and to ensure our strength in the years ahead.”

Key Stats: A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 19.2%.

Competitors to Watch: News Corporation (NASDAQ:NWS), The Walt Disney Company (NYSE:DIS), Time Warner Inc. (NYSE:TWX), The New York Times Company (NYSE:NYT), Gannett Co., Inc. (NYSE:GCI), CBS Corporation (NYSE:CBS), The E.W. Scripps Company (NYSE:SSP), Journal Communications, Inc. (NYSE:JRN), and Pearson PLC (NYSE:PSO)

Stock Performance: Shares of NWSA are trading at $17.35 as of May 4, 2011 at 5:15 PM ET, up a penny from today’s closing price of $17.34.


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