News Corp. Gets Lift From 'Avatar'

News Corp. shares jump afterhours on the company's 'Avatar'-boosted results.
By Scott Eden ,

Updated from Tuesday, Feb. 2NEW YORK (TheStreet) -- Avatar went a long way toward helping media goliath News Corp. (NWSA) - Get Report exceed Wall Street targets for its just-ended quarter.

The company's filmed entertainment division, which includes

Avatar

studio Twentieth Century Fox, saw its quarterly operating income triple and its revenue rise 28% to nearly $1.9 billion from a year ago. Released on Dec. 18, with only 13 days left in News Corp.'s December quarter,

Avatar

promises to boost Rupert Murdoch's company's results for some time to come.

As widely reported, the movie has already taken in box office receipts of $2 billion, making it the highest grossing motion picture in the history of motion pictures, a fact noted prominently in the News Corp. earnings release, issued after the closing bell Tuesday and on the same afternoon that the 3-D blockbuster recevied a raft of Oscar nominations.

Overall, News Corp. earned 25 cents a share in the quarter, excluding items. Analysts were expecting 20 cents a share. Revenue, meanwhile, rose 10% to $8.7 billion, also surpassing Wall Street estimates, which called for $8.2 billion.

News Corp.'s more widely traded A shares fell to $12.53 in after-hours trading Tuesday after closing the day at $12.76.

Media wonks and market participants have been searching eagerly for any evidence that the advertising business has emerged from its depression. Surely they'll look to News Corp.'s results for a metaphorical Xanax, despite

mixed results from USA Today publisher

Gannett

(GCI) - Get Report

on Monday.

Taking into account

a recent $500 million legal settlement

, News Corp. had a profit of $254 million, or 10 cents a share, in its fiscal second quarter, which ended Dec. 31. That marks a reversal from the huge loss the company recorded in the corresponding 2008 period -- $6.4 billion -- when it had to write down the value of its newly acquired trophy holding, the Dow Jones Co., publisher of

The Wall Street Journal

.

Excluding those Dow Jones asset impairment charges, the company would have earned 15 cents a share year ago, on revenue of $7.87 billion.

Among News Corp.'s other segments, cable-television programming also gave the company's results a lift in the just-ended period. Operating income there jumped 35% to $604 million. News Corp. cited rate increases from its Fox News Channel affiliates for the increase.

The broadcast television division, meanwhile, which faced off against

Time Warner Cable

(TWC)

in a high-profile dustup over programming rates early in January, swung to a profit of $29 million in the quarter from a loss of $2 million a year ago.

The company's newspaper business, which Murdoch has pitted against search engine and news aggregator

Google

(GOOG) - Get Report

in another high-profile media battle, had operating income of $259 million on revenue of about $1.7 billion, up from $200 million on $1.5 billion in revenue a year ago. Increased ad revenue at

The Wall Street Journal

was a prime driver, News Corp. said, though it didn't break out the percentage increase.

Digital properties, including the stumbling MySpace social networking site, continued to be a money suck. Categorized as "other" on the company's income statement, the segment's losses widened to $125 million from $38 million last year.

Once again, good old hardbound and paperbound books made money for the Australio-Anglo-American media conglomerate. The unit posted explosive year-over-year profit growth of 182% to $65 million. News Corp. cited a few titles as the chief money engines behind that performance:

Vampire Diaries

was one.

Going Rogue

by Sarah Palin was another.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.

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