Simpsons provide boost for News Corp

Sydney, Nov 8, 2007 (ABN Newswire) - News Corporation (NWS) posted strong growth in operating income today, largely on the back of the success of The Simpsons Movie. Compared with the same period last year, operating income grew 23% in the three months to 30 September, on revenue growth of 19%. With operating earnings growing faster than revenues, profit margins widened.

The standout performer for News Corp was the Filmed Entertainment division, which delivered a 51% increase in operating income to US$362 million.

Homer Simpson and his family were the star performers, with The Simpsons Movie raking in gross worldwide box office receipts of US$525 million.

The strong operational results were achieved despite the company investing heavily to expand its 'new media' offerings.

Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said:

"The strength of our financial results during the first quarter is yet another illustration of our ability to deliver sustained growth while concurrently investing in tomorrow's profit generators.

"The 19% revenue growth and 23% operating income growth in the quarter was achieved despite spending to expand our cable portfolio both domestically and internationally; despite continued investment in broadening our internet offerings; and despite additional costs associated with upgrading the colour capacity at our newspaper group."

However, the strong result at the operational level was not enough to provide a boost to the share price. News Corp shares were down nearly 3% in New York trading on Wednesday, in an admittedly ugly market. In Australian trading today the stock fared slightly better, finishing down 1.7%.

A weaker Australian dollar may have benefited News Corp. As most of the company's earnings are derived in US dollars, weakness in the greenback makes the stock less attractive for Aussie dollar investors.


 

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