News Corp. says its split-up is on track
The separation of Rupert Murdoch's News Corp. into two separate publicly traded companies is on track to be completed by the end of the current fiscal year, executives said today.
On a quarterly earnings call with Wall Street analysts, News Corp. chief financial officer David DeVoe said in prepared remarks that the company's corporate crack-up was moving along nicely, with plans "in the next month or so" to file additional documents related to the regulatory and board approval that is necessary for the proposal to move forward.
In a statement ahead of the call, the company anounced that the separation "is expected to be completed in approximately one year from the date of announcement."
That would put it around sometime this summer. The company announced on June 28 last year its intention to split its profit-making entertainment holdings, like Fox News and 20th Century Fox, from its less lucrative publishing assets, which include The Wall Street Journal, the New York Post, the Times of London, The Sun and various other newspapers in the U.S., U.K. and Australia, as well as Dow Jones Newswires and the book publisher HarperCollins.
The entertainment company will be called Fox Group. The publishing company will retain the name News Corp., although it is being referred to internally as PubCo. The quarterly cost related to the split was $23 million.
The progress update came on the heels of improved second-quarter results for News Corp., which increased revenue by 5 percent year-over-year to $9.43 billion in the three-month period that ended in December. The revenue rise was driven mostly by 18-percent growth in News Corp's cable network segment. Net income for the quarter clocked in at $2.37 billion up from $1.06 billion during the same window a year earlier.
Publishing income was up $16 million to $234 million thanks in part to "increased contributions from the U.K. newspapers which benefitted from the launch of the Sunday edition of The Sun in February 2012," according to the company's earnings release. Charges related to the U.K. phone-hacking scandal were down to $53 million from $87 million during the second fiscal quarter of 2012.
During the quarter, News Corp. also shut down its money-losing tablet publication, The Daily.
Rupert Murdoch, previously a staple on the earnings calls, was once again a no-show, although the News Corp. chairman's son James, the company's deputy chief operating officer, was on the line today.
In a statement, the elder Murdoch said: "As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.”