News Corp Steady after Strong Earnings

Shares of News Corp. (NASDAQ: NWS) are steady in pre-market trade and close to a 52 week high after the company reported quarterly profits and revenues that beat analyst forecasts.

The company reported second quarter revenue of $8.98 billion, a 2% increase over the $8.76 billion of revenue reported a year ago. This exceeded the analyst consensus estimate of $8.91 billion. The quarterly revenue increase was led by growth at the Company’s cable network programming, television and filmed entertainment segments, partially offset by declines at the Company’s publishing and other segments.

Net income rose to $1.06 billion or 42 cents a share, from $642 million, or 24 cents a share, a year earlier. Excluding some items, profit was 39 cents, easily exceeding the 34cent a share analyst consensus estimate.

Chairman and Chief Executive Officer Rupert Murdoch said “The significant growth we reported in the quarter in the Cable Network Programming, Television and Filmed Entertainment segments clearly validates our strategy to develop and distribute superior wide-ranging content. I am particularly pleased with the success of our business strategies in spite of the uncertain economic conditions that we continue to face. News Corporation’s commitment to delivering value to our stockholders is unwavering and we will continue to focus on generating superior shareholder returns, as evidenced by our strong year to date earnings and the successful completion of over half of our previously announced share repurchase program.”

“Because their fundamental businesses haven’t been that volatile, this whole ball game is really about buybacks –that’s what moves the stock,” David Bank, an analyst with RBC Capital Markets in New York, said in an interview. The company’s stated commitment to further buybacks may boost the stock, said Bank, who rates the shares his “top pick”.

The company also said the hacking scandal it was involved in had cost it $195 million. The company said it incurred an $87 million expense in the quarter tied to the investigations.

At least three top executives have departed since December and Murdoch’s son, James, who led News International from London, is moving back to New York to work more closely with Chief Operating Officer Chase Carey. The scandal hasn’t hurt the company’s business, said Alan Gould, an Evercore Partners analyst in New York.

“If anything, what you’re seeing is Chase gaining power internally at the expense of James,” Gould said in an interview before News Corp. released results. Gould rates the shares “overweight”.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.