Nov. 7 (Bloomberg) -- News Corp., the media company controlled by Rupert Murdoch, said first-quarter profit fell 13 percent from a year earlier, when a gain from the sale of investments boosted results. Sales topped analysts' estimates.

Net income dropped to $732 million, or 23 cents a share, from $843 million, or 27 cents, a year earlier, New York-based News Corp. said today in a statement. Sales rose 19 percent to $7.07 billion, beating the $6.52 billion average of nine analysts' estimates compiled by Bloomberg.

Ticket sales from ``The Simpsons'' movie helped boost film- studio profit by 51 percent. Higher affiliate fees paid to the Fox News cable channel and Sky Italia also contributed. Murdoch, who spearheaded News Corp.'s purchase of Dow Jones & Co. for $5.2 billion, is exploiting MySpace's position as the world's most popular social-networking Web site to generate advertising sales.

``It was a solid quarter,'' said David Bank, an analyst at RBC Capital Markets in New York, who recommends buying the shares and doesn't own any. ``They need to keep executing in terms of Fox Interactive and Sky Italia.''

News Corp. Class A shares fell 63 cents to $20.92 at 4 p.m. in New York Stock Exchange composite trading. News Corp. is the owner of more than 110 newspapers and the Fox broadcasting network. Profit matched the 23-cent average of 13 estimates.

Murdoch, 76, plans to increase readers and advertising at Dow Jones by ending subscription fees at WSJ.com. He is also opening the MySpace Web site to programmers who can add features to the site. News Corp. gets about 45 percent of its revenue from ads.

Segments

Operating income for the quarter increased 23 percent to $1.05 billion from $851 million, which excludes a year-earlier gain from the sale of investments in the Sky Brasil and Phoenix satellite businesses.

Film sales rose 30 percent to $1.58 billion, and profit jumped to $362 million. Profit at Fox cable networks rose 16 percent to $289 million in the period ended Sept. 30, and revenue climbed 24 percent to $1.1 billion.

The Sky Italia satellite TV division had a profit of $48 million, compared with a loss of $13 million the previous year, as the business attracted more viewers. Sky Italia added a net 410,000 subscribers, for a total of 4.24 million. Sales increased 20 percent to $747 million.

Losses narrowed at the segment that includes Fox Interactive Media to $43 million from $73 million on growth in advertising sales at MySpace. Revenue for the segment jumped 65 percent to $653 million.

Global

``We're positioning and investing to operate in a global society increasingly dependent on digital media,'' Murdoch said on a conference call.

MySpace said this week that Microsoft Corp. and Toyota Motor Corp. are among 50 advertisers for its program to target narrow user groups. The ad targeting program, which started in July with 10 categories including auto and fashion, will expand to more than 1,000 by the end of the year to go after users with multiple interests.

The Internet company plans to be operating in 30 countries in the next year and may get more than half of its sales outside the U.S. by 2012.

News Corp. will likely gain market share from the Hollywood writers strike, benefiting from reality shows such as ``American Idol'' and cartoons. The company will also save money by not making pilots, said Chief Operating Officer Peter Chernin.

Broadcasting

Broadcast TV profit fell 4.7 percent to $183 million, cut by losses at MyNetworkTV and lower earnings from Fox television stations. Sales rose 3.8 percent to $1.15 billion.

News Corp. agreed to buy Dow Jones, publisher of the Wall Street Journal, in August. The purchase, to be completed in December, may help News Corp.'s new Fox Business Network compete with CNBC, owned by General Electric Co., and Bloomberg Television, part of Bloomberg LP.

Murdoch's priorities for the Wall Street Journal are to improve the print edition and its Web site, as well as international editions that he described as ``a lot less than satisfactory.''

Profit from book publishing fell 35 percent to $36 million, and News Corp.'s newspaper division reported a 25 percent drop in earnings to $93 million. The magazine and inserts unit posted profit that was little changed at $79 million.

Eighteen analysts recommend buying News Corp. shares and three suggest holding them, according to data compiled by Bloomberg. No analyst recommends selling the stock.

To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.

Last Updated: November 7, 2007 18:48 EST