News Corp. net profit down 21 percent (Update)

The lack of a new blockbuster hit like 2009's "Avatar" helped push third-quarter profits down 21 percent, media and entertainment giant News Corporation said Wednesday.

Profit for the quarter to March 31 fell to $682 million from the $861 million record quarter a year earlier, when the company was still raking in huge sums from "Avatar," the world's best-selling film.

The company also continued to see significant losses from its sagging MySpace social media website, which has lost ground to Facebook, and also took a $125 million hit to pre-tax income after it settled an antitrust lawsuit by Insignia Systems.

But the company said it expected a boost in the current quarter from its newest film hit "Rio."

Revenue declined to $8.26 billion from $8.78 billion in the same quarter a year ago.

Earnings per share were 24 cents, compared with 32 cents a year earlier.

"As we anticipated, News Corporation's third-quarter financial results faced challenging comparisons when set against last year's record 'Avatar' contribution at our Filmed Entertainment business," News Corp. chairman and chief executive Rupert Murdoch said in a statement.

"However, the great response to 'Rio' and our confidence in our upcoming releases indicate that the difficult comparisons in this segment over the past nine months are now behind us," Murdoch said.

"I'm particularly pleased that our Television segment, viewed by the market just one year ago as a challenged business, more than quadrupled its earnings contributions over the prior year quarter."

The media giant saw income in its cable programming unit rise 25 percent to $735 million, and television income soared more than fourfold to $192 million. Its film division saw income fall by half to $248 million due to the "Avatar" effect.

Meanwhile losses mounted 10 percent to $165 million in the income segment including MySpace, "stemming largely from lower advertising and search revenues," the company said.

Publishing also dropped, both due to the $125 million litigation charge and sharp falls in advertising revenues for its Australian and British newspapers, it said.

President and chief operating officer Chase Carey said the company's international business was developing well.

"We are now truly poised to take our business to a much higher level of profitability over the next one to two years," he said, citing especially the potential in US cable and broadcast television channels.

He said the company continue to develop its news-making The Daily, a news application made specifically for the new Ipad tablet computer.

They had lost about $10 million on the startup, but so far the application had been downloaded 800,000 times.

"It's a work in progress," he said.

"On all fronts, whether for the daily itself and the tablet market itself and how it evolves, it's pretty early days."

On the company's move to take control of BSkyB, the British pay-TV giant which screens live English Premier League football, Carey called the rise in its share price "troubling."

"There seems to be an unrealistically rosy view of the challenges Sky will have to navigate going forward," he said.

Last year, News Corp. bid 7.8 billion pounds for full control of BSkyB, but the television giant demanded a higher price tag.

In March the British government cleared the way to approve News Corp's bid, but only after it agreed to spin off its Sky News operation to address competition concerns.

News Corp. -- which controls such major media outlets as Fox television and The Wall Street Journal -- currently has about 39 percent of BSkyB.