Murdoch Delighted But Wary After News Corp's Profits Surge

Cable networks, television and movies powered a 59% surge in annual profits at News Corporation although media mogul Rupert Murdoch warned last night that "less robust growth" was imminent.

Global profits jumped from $3.4bn to $5.4bn in the year to June at the media empire which recently took over the Wall Street Journal's publisher, Dow Jones.

For the fourth quarter, earnings were up 21% to $1.5bn.

Among top performers for the full year were News Corp's cable channels in the US and 20th Century Fox film studio which perked up in the final quarter of the year thanks to DVD releases such as Juno and Alvin and the Chipmunks.

Murdoch said he was "extremely pleased" with the results but sounded a note of caution on the year ahead. "Although we clearly face more challenging macro-economic conditions in fiscal '09, we're well positioned to deliver continued, if somewhat less robust growth," he said.

Profits from News Corp's newspaper division rose by $114m to $767m as Dow Jones provided an initial contribution of $24m. The Wall Street Journal's pay-to-access website emerged as a money spinner with an 88% jump in online subscriptions. "That the newspaper sector is changing is clear," Murdoch said. "But companies willing to invest in new forms of delivery, which have a commitment to quality, will prosper."

In Britain, where Murdoch owns the Times and the Sun, the company said its newspaper profits were slightly higher as a drop in depreciation costs on printing equipment offset weak advertising revenue. But News Corp's 39% stake in broadcaster BSkyB turned in a deficit of $145m as BSkyB wrote down the value of its stake in ITV.

In the US, earnings from the Fox television channels fell sharply in the final quarter, reflecting lower ratings after a strike by writers disrupted programming.