UPDATE 2-News Corp profit up on ad recovery, Avatar

* Fiscal Q2 adj EPS 25 cents vs Street view 20 cents

* Q2 rev $8.684 bln vs Wall St view $8.230 bln

* Ups dividend payout by 25 pct to 7.5 cents a share

* Shares up 3.5 percent.

(Adds analyst comment, share price)

NEW YORK, Feb 2 (BestGrowthStock) – Media conglomerate News Corp
(NWSA.O: ) posted better-than-expected quarterly results on
Tuesday thanks to a recovery in local advertising sales and the
blockbuster 3-D movie “Avatar,” sending its shares up 3.5

News Corp, which also raised its dividend by 25 percent,
said fiscal second-quarter net income was $254 million, or 10
cents a share. That includes a $500 million litigation
settlement payout to Valassis Communications (VCI.N: ).

A year earlier, it posted a net loss of $6.4 billion, or
$2.45 a share, which reflected a massive writedown for its
purchase of Dow Jones, and other items.

Excluding charges in both periods, second quarter adjusted
profit was 25 cents a share, up from 15 cents a year ago.
Analysts were expecting the company to post earnings of 20
cents a share on average, according to Thomson Reuters

Revenue rose 10 percent to $8.68 billion, ahead of
analysts’ average forecast, with sales rising in its film,
local TV, cable, book publishing and, perhaps most
significantly, newspaper divisions.

“Basically every division outperformed, the ad market is
back and newspapers are probably the best outperformer on the
operating incoming,” said Miller Tabak analyst David Joyce.

The dividend increase shows the confidence management has
in growing operating income for the fiscal year, Joyce said.
News Corp will raise the dividend to 7.5 cents.

News Corp’s Hollywood studio business saw its operating
income nearly triple to $324 million thanks to a
record-breaking performance from the 3D science-fiction movie
“Avatar,” which James Cameron directed.

“Avatar” has sold more than $2 billion in ticket sales at
the worldwide box office, overtaking “Titanic” to become the
biggest movie of all time. It earned nine Academy Award
nominations on Tuesday. [ID:nN02236971]

In addition to a strong performance from its film business,
News Corp benefited from improved advertising sales, both at
its local TV stations and for its newspaper division.

Operating income at its local TV stations — helped by
solid sales during the World Series baseball championship —
rose 19 percent to $29 million.

The company’s newspaper unit, which owns names like The
Wall Street Journal in New York and The Sun in London, posted a
30 percent rise in operating income because of higher ad
revenue at the Journal, lower expenses and favorable foreign
exchange rates.

The Fox cable programming unit posted 35 percent growth in
operating profit, with a strong ratings performance at its Fox
News Channel.

Though the company does not break out numbers for MySpace,
the unit that houses the social networking site saw its
earnings contributions decrease by $32 million during the
quarter because of lower search and advertising revenue.

Shares rose to $13.21 in late trade, after closing the
regular session at $12.76, up 1.84 percent.

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(Reporting by Yinka Adegoke. Editing by Robert MacMillan)

UPDATE 2-News Corp profit up on ad recovery, Avatar