News Corp. Profits Fell 22% Before the Hacking Scandal
News Corp.’s (NASDAQ:NWSA) profits fell 22% in the last quarter. Even though news of the phone-hacking scandal at the company’s U.K. newspaper unit had yet to break at the end of the last quarter, the company’s profit fell to $683 million, down from $875 million a year earlier.
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However, the newspaper business only makes up a small fraction of the media conglomerate. News Corp.’s (NASDAQ:NWSA) 39% stake in U.K. satellite television broadcaster BSkyB (PINK:BSYBY) is far more lucrative, and could have been more so had the News Corp. not been forced to abandon a bid to buy the remainder of BSkyB last month because of the News of the World scandal. But neither the hacking scandal nor the decision not to buy BSkyB had any effect on the company’s most recent earnings report, as they both happened after June 30, when the most recent quarter ended.
News Corp.’s (NASDAQ:NWSA) Hollywood film studio 20th Century Fox, its U.S. television network Fox Broadcasting, its Harper Collins, and the Wall Street Journal carry significantly more of the blame for the company’s poor quarterly results. Weaker box office revenues and fewer DVD sales significantly cut down on the company’s profits, despite an 11% increase in revenue.