News Corp will decide within three months what to do with its growing cash pile, Rupert Murdoch said on Tuesday, as his media empire again raised its profit outlook in the clearest
signal of a strong rebound in advertising revenues.
The $2.7bn (£1.8bn) box office success of 3D epic Avatar helped propel a 19 per cent jump in revenues for the three months to March, in a quarter that saw continued growth at Fox News and a rebound in newspaper advertising.
Dave Devoe, chief financial officer, who predicted three months ago that operating income this year would be up “in the low 20 per cent range”, raised the guidance to the “high 20 per cent range”.
“The advertising market is currently seeing strong across-the-board growth, particularly in the US and Britain,” Mr Murdoch said. It lifted newspapers including the Wall Street Journal, where advertising was up 25 per cent, and UK titles including The Sun and The Times, up 10 per cent.
This gave the group growing confidence to spend its cash, which increased from $6.54bn to $8.18bn in the fiscal third quarter, he said. It was “well aware” of the inefficiencies of its balance sheet and was reviewing all options.
Chase Carey, chief operating officer, hinted that a purchase of the remainder of BSkyB, the News Corp-controlled UK satellite broadcaster, was unlikely.
Mr Murdoch said the group was three to four weeks from unveiling “innovative subscription models” for digital content.
It is in advanced talks with other publishers and technology companies for a service powered by Dow Jones technology, a person briefed on the plans said.
Cable programming was again the largest contributor to profits, with a 38 per cent rise in operating income from $426m to $588m, driven by 31 per cent profit growth at Fox News.
Avatar’s success drove a near-billion dollar increase in revenues at the Fox film studio, where operating income rose 76 per cent, from $282m to $497m.
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