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News Corp. Tops Estimates on Ad Gains, Fees

Wednesday, 02 Nov 2011 04:35 PM

News Corp., owner of Fox Television and the Wall Street Journal, reported earnings that topped analysts’ estimates on gains in advertising and subscriber fees.

Profit, excluding some costs, climbed to 32 cents per share for the first fiscal quarter ended in Sept. 30, the New York-based company said in a statement Wednesday. Analysts had estimated a profit of 29 cents, according to an average of estimates compiled by Bloomberg.

News Corp., led by Chairman and Chief Executive Officer Rupert Murdoch, has been fighting criticism of management after a phone-hacking scandal at one of its London newspapers. At the annual meeting last month, investors called for an overhaul in governance, and one third of the shareholders voted against the election of Murdoch’s sons to the board.

The results may help Murdoch maintain control, though the company continues to face inquiries into the phone-hacking practices, said David Bank, an analyst with RBC Capital Markets.

“The ongoing controversy at the company has little to do with its operating issues,” said the New York-based Bank, who recommends the stock and doesn’t own any shares, said in an interview.

Revenue for the quarter climbed 7.2 percent to $7.96 billion, beating the average analyst estimate of $7.66 billion.

Net income fell 4.8 percent to $738 million, or 28 cents a share, compared with $775 million, or 30 cents, last year.

Buyback Tally

News Corp. has repurchased $1.88 billion of stock since announcing a buyback in July as part of a $5 billion re-authorization program.

“We like the buyback,” said Christopher Marangi, a fund manager at Rye, New York-based Gamco Investors Inc., which held 6.18 million Class A shares as of November, according to data compiled by Bloomberg. “The silver lining to the scandal is that deployment of cash flow appears to be directed in a more appealing way to shareholders.”

News Corp., also the owner of the Twentieth Century Fox film studio, rose 1.3 percent to $16.90 in New York at the close. The Class A shares have gained 16 percent this year.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. and its Dow Jones division in providing financial news and data.

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News Corp., owner of Fox Television and the Wall Street Journal, reported earnings that topped analysts estimates on gains in advertising and subscriber fees.Profit, excluding some costs, climbed to 32 cents per share for the first fiscal quarter ended in Sept. 30, the New...
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Wednesday, 02 Nov 2011 04:35 PM
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