AP Business Writer
LOS ANGELES (AP) -- News Corp. beat Wall Street's forecast for the January-March quarter, helped by growing revenue from pay TV networks including Fox News Channel and FX, and the hit 20th Century Fox movie "Life of Pi."
The New York-based company controlled by billionaire Rupert Murdoch also said Wednesday that it benefited from raising its stake in satellite TV company Sky Deutschland. It now holds a majority stake.
News Corp.'s net income jumped to $2.85 billion, or $1.22 per share, from $937 million, or 38 cents per share, a year ago.
Excluding items such as the one-time $2.1 billion profit related to Sky Deutschland, adjusted earnings came to 36 cents per share, a penny better than expected by analysts surveyed by FactSet.
Revenue rose 14 percent to $9.54 billion, also better than the $9.14 billion expected by analysts.
Some of the revenue came from adding the results of companies in which News Corp. now has a majority stake, like Sky Deutschland. Excluding that accounting benefit, revenue would have risen 7 percent to $9 billion.
The company's stock rose $1.06, or 3.3 percent, to $32.92 in after-hours trading after the results were released.
News Corp. is at a turning point in its history, which traces back to a small newspaper company in Australia started in 1923, and bought into by Murdoch's father. It plans to split into two publicly traded companies by the end of June -- one company holding its TV and movie properties to be known as 21st Century Fox, and a smaller entity focused on newspapers and publishing that will keep the name News Corp.
At the same time, it is launching a new national sports channel in the U.S. on Aug. 17 called Fox Sports 1, which it hopes to build into a competitor to The Walt Disney Co.'s ESPN. It also plans to launch in September FXX, another pay TV channel under its FX brand aimed at 18 to 34 year olds.
Addressing analysts' concerns about the cost of those initiatives, News Corp. Chief Operating Officer Chase Carey said the expense of launching the networks, plus some international channels, would be "a couple hundred million (dollars) and change" in their first year of operation.
As the company nears the split, investors are awaiting news of the strategies for operating both.
Carey said the company will hold an investor day in New York on May 28 to detail plans for the publishing company, while an investor day for the entertainment company is planned for early August.
"Our separation is our top priority," Carey said.
Investors have long hankered for the split, as most see the publishing unit as a drag on earnings and revenues. Since the split was announced last June, News Corp.'s stock is up about 50 percent.
Investors remain concerned about how the company uses its cash, which stood at $9.3 billion at the end of March. The publishing company will have $2.6 billion in cash and no debt when it is spun off.
Carey said Wednesday that the company is suspending the buyback of $10 billion in stock until after the split is complete. News Corp. has bought back $6.6 billion since the buyback program began two years ago.
"The big question at investor day is going to center on capital allocation," said Brett Harriss, an analyst with research brokerage Gabelli & Co.
The publishing company is seen as a possible bidder for Tribune Co. newspapers including the Los Angeles Times, and it also continues to pour money into its fledgling for-profit education venture called Amplify.
News Corp. also continued to deal with ongoing probes in the U.K. over phone hacking and bribes by employees of its newspapers. The January-March quarter included $42 million in costs related to the investigations, bringing the total spent on them to $388 million since the scandal broke in the summer of 2011.
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