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Last Updated: Wednesday, 13 August, 2003, 16:50 GMT 17:50 UK
War coverage lifts News Corp
Rupert Murdoch
Mr Murdoch's empire is looking healthier
Patriotic coverage of the conflict in Iraq by US cable channel Fox News has helped to push Rupert Murdoch's News Corporation back into profit.

Fox News saw its profits double during the conflict, as viewers switched in droves from the main networks and other cable channels.

The increase in advertising revenue easily overcame the additional cost of covering the war, the company said.

Profits were also up at Fox television, with reality shows such as Joe Millionaire and American Idol, based on ITV1's Pop Idol, pulling in the ratings.

Share boost

News Corporation, which owns the Sun and Times newspapers in the UK and a major stake in satellite broadcaster BSkyB, reported profits of $370m (230m) for the April to June period.

That compares with losses of $1.74bn in the same period a year ago, which included a one-off charge relating to a bad investment decision.

The results were ahead of Wall Street estimates and News Corporation saw its shares gain 4 cents to $32.62 in early trade on the New York Stock Exchange.

The News Corporation-controlled Fox Entertainment Group saw its shares rise 17 cents to $29.96.

Ratings winner

News Corporation's cable networks unit, which includes Fox News, nearly tripled its operating profits, from $34m to $96m, on a 19% increase in turnover.

Fox News' diet of conservative commentators and unashamedly patriotic frontline reports from Iraq was a particular ratings winner.

The channel claimed a 92% increase in primetime viewers and 108% increase over 24 hours, consolidating its lead over CNN as the most-watched cable news channel.

According to some reports Fox News increased its number of viewers by 300% to average 3.3 million daily at the height of the conflict.

Meanwhile, News Corporation's television group, which includes the Fox Broadcasting Company and STAR TV, saw its profits increase by $112m, to $291m, on the back of a 25% increase in peak-time viewers for the Fox channel.

News Corporation's film unit, which includes the 20th Century Fox studio and television production, also improved its performance, reporting a 13% increase in operating profits, on a 19% increase in turnover.

The newspaper group, which includes the New York Post and Australia's Daily Telegraph, saw a 7.7% increase in profits, on an 18% increase in turnover.

Satellite progress

News Corporation's Chief Financial Officer David DeVoe said the company expected high single digit to low double digit growth in operating income for the fiscal year 2004.

That would include the absorption of a $300m loss for its Sky Italia business, which is investing heavily in Italy's embryonic satellite TV market.

News Corporation also said it was making good progress on its efforts to break into the US satellite television market.

It said it expects to gain regulatory approval for its $6.6bn acquisition of satellite television company DirecTV by the end of this year.

News Corporation struck a deal to purchase DirecTV's parent company, Hughes Electronics in April, just months after US regulators had scuttled a similar bid from EchoStar Communications.

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