DVD Spurs News Corp. Profit5 Aug, 2008 By: Erik Gruenwedel
Bucking an industry trend, 20th Century Fox Film Corp., including Fox Home Entertainment, generated $220 million in fourth quarter (ended June 30) operating income, more than double the $106 million created during the previous year's period.
Top DVD drivers include Alvin and the Chipmunks, Juno, AVP: Requiem and 27 Dresses. The strong DVD revenue was partially offset by global costs associated with the theatrical launches of The Happening and What Happens in Vegas.
The film segment reported $1.25 billion in fiscal year 2008 operating profit, the seventh consecutive record year performance. Top DVD performers include Night at the Museum, Borat and Eragon.
In a conference call with analysts, Peter Chernin, president and COO, said DVD sales were up 5% in the first six months of the year and continued to outperform despite “hand wringing” by the media about the industry.
“Sales of Blu-ray movies are up 200% through June, and up 300% from the same period last year,” Chernin said.
The executive said 20th Century Fox in fiscal 2009 will release several tent pole theatrical releases, including Baz Luhrmann's Australia (Nov. 14), The Day the Earth Stood Still (Dec. 12), Marley and Me (Dec. 25), X-Men Origins: Wolverine (May 1, 2009), Night at the Museum 2: Battle of the Smithsonian (May 22), and Ice Age: Dawn of the Dinosaur.
“All should do strong DVD business,” Chernin said.
The challenging advertising market contributed to a decline in the television unit, which saw the Fox TV stations and Fox Broadcasting Co., among others, posting a 28% decline in operating income to $279 million from $385 million last year.
Overall, quarterly income topped $1.1 billion, compared to $890 million in profit last year. Revenue exceeded $8.5 billion from $7.3 billion last year.