Despite a mix of scandals and failed business purchases, News Corp. was able to beat the Street's expectations with its fourth quarter earnings.
Excluding one-time costs, News Corp. posted earnings of $982 million, or 35 cents per share, beating average analyst estimates of 30 cents per share.
Although the company beat analyst expectations, it saw its net profit drop 22 percent behind the sale of failed investment, MySpace, and the failed purchase of British Sky Broadcasting Group (BSkyB). The company had to give up its pursuit of BSkyB after its News of the World newspaper was caught phone-hacking voicemails of a dead British teenager.
"While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World," News Corp. chairman and chief executive Rupert Murdoch said in a statement. "It is important to note that there has been no material impact on our other operations."
The company has taken quite the reputation hit since the News of the World scandal first came to light. News Corp lost two of its top executives due to the scandal in former Dow Jones CEO Les Hinton and former News International chief Rebekah Brooks.
These latest earnings reflect the period ending on June 30, so the News of the World scandal hasn't had its full impact yet, but the company actually only gets less than a quarter of its profits from its newspaper business.
The owner of the New York Post and The Wall Street Journal only generates about 20 percent of its operating profits from its publishing side of the business.
The much more profitable operation is its broadcasting unit, which includes Fox News and Fox network affiliates, posting a 15 percent revenue increase. The cable broadcasting saw ad revenue rise by 23 percent and affiliate fees increase by 7 percent.
The company also took a hit when it unloaded social network MySpace for $35 million in June. News Corp. initially bought the company for $580 million in 2005, but saw its investment fizzle when rival Facebook came to power, unseating MySpace from its perch atop social networking.
News Corp. closed down 5.77 percent to $13.71. It was trading down an additional .15 percent in post-market trading.