International media group News Corp swung to a first-quarter profit of $US68 million ($A95 million), boosted by the acquisition in Australia of Sky News and an increase in Australian newspaper digital subscribers.
Shares in the Rupert Murdoch-led media giant surged on Friday as the company said revenue and earnings for the three months to September 30 had improved across all its businesses, lifting it from a $US15 million loss in the prior corresponding period.
Group earnings before interest, tax, depreciation and amortisation rose 92 per cent to $US249 million, with the news division reporting a 59 per cent rise to $US73 million.
News Corp said its Australian mastheads, which include The Australian and The Daily Telegraph, boasted 375,400 subscribers at September 30.
That was up 32.6 per cent on the same period a year earlier, although that included those from the multiple titles it acquired by buying Australian Regional Media from APN this year.
Chief executive Robert Thomson said the end of Google's so-called "first-click-free" policy would further boost news, and said News Corp was talking with Google and Facebook about subscriptions and personal data sharing.
"We have reason for optimism about the future of our premium media businesses, in light of the profound changes agreed by Google in the ranking of news content," Mr Thomson said.
"These changes follow almost a decade of campaigning by News Corp."
Overall, News Corp's advertising revenue remained flat at $US670 million, while circulation and subscription revenue rose by $US30 million to $US651 million.
Revenue and earnings from cable television also rose following the acquisiton of Sky News, although Foxtel earnings declined 18 per cent in Australian dollar terms due to the cost of acquiring AFL rights.
Foxtel subscriber numbers were down compared to a year earlier - primarily due to the shutdown of streaming service Presto and the winding down of Telstra's T-box - but up on the prior quarter due to the launch of Foxtel Now on-demand.
The proposed merger of Foxtel and Fox Sports into an entity 65 per cent controlled by News Corp should is expected to receive regulatory approval in the first half of the 2018 calendar year.
"The combined company, with majority control by News Corp, is expected to fundamentally transform our revenue and EBITDA profile, and increase the relative share of digital subscription businesses," Mr Thomson said.
Nonetheless, digital real estate - which includes News Corp's 61 per cent-state in REA Group, the operator of realestate.com.au - was again the biggest contributor to earnings growth.
The segment was up $US28 million, or 42 per cent, compared to a year ago.
Total earnings were also boosted by a $US46 million tax-related benefit, while exchange rates were also more favourable than a year earlier.
News Corp shares on the ASX closed at a near-two-year high, up 86 cents, or 4.6 per cent, to $19.70
