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News Corp shrugs off $87m loss on NoW closure as profits soar

Murdoch firm sees 43% income decrease in publishing division – but losses offset by 65% growth for company as a whole

The ongoing investigations that led to the closure of the News of The World cost Rupert Murdoch’s News Corp m in the last three months of 2011, the company has announced. But the media giant shrugged off the hacking scandal as net income increased 65% for the quarter ended December 31.

The loss of the paper, the most profitable in Murdoch’s stable, has cost the firm a total of 4m, mostly in lawyers’ fees, in the last six months of 2011, said Chase Carey, News Corp’s chief operating officer. It also contributed to a 43% decrease in operating income at the media giant’s publishing division, the company said releasing its latest quarterly results.

News Corp’s results came on the same day that the company paid more settlements to victims of the phone-hacking scandal. It also emerged that others, including the singer James Blunt, were considering bringing cases against News Corp.

Publishing income fell 2m to 8m, a 43% drop from the same period a year ago. News Corp blamed lower advertising revenues at its Australian newspapers, as well as the loss of the News of the World in the UK.

“Our priority on this is to make things right,” said Carey. He declined to comment on how much money News Corp expected to pay in settlements or legal fees.

But the losses at News Corp’s newspaper division were more than offset by strong growth in the firm’s cable networks and movie studio divisions and second quarter profits soared 65%. Net income rose .06bn for the fiscal second quarter, compared with 2m a year ago.

Fox News marked its 10th consecutive year as the US’s leading cable channel last year, and the cable division reported 2m in operating income for the quarter, a 20% hike compared to last year.

News Corp’s film division reported income of 3m for the quarter, a 4m increase over the 9m reported in the same period a year ago. The results were helped by the home release of movies including Rio, Rise of the Planet of the Apes and X-Men: First Class, plus the theatrical release of Oscar hopeful The Descendants. Revenues from digital sales via Amazon and Netflix were 0m for the last six months, said Carey.

Income at Fox’s television assets grew 25% to 9m helped by the success of The X Factor, comedy show New Girl, Major League Baseball and the NFL.

Murdoch, News Corp’s chairman and chief executive officer, said in a statement: “I am particularly pleased with the success of our business strategies in spite of the uncertain economic conditions that we continue to face.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds