Feb. 4 (Bloomberg) -- News Corp., the media company controlled by Rupert Murdoch, reported higher second-quarter profit and raised its annual forecast, citing growth from Fox TV channels and the MySpace Web site.

Net income rose 1.2 percent to $832 million, or 27 cents a share, from $822 million, or 26 cents, a year earlier. Revenue increased 9.5 percent to $8.59 billion in the period ended Dec. 31, the company said today in a statement. Sales beat the $8.28 billion average of 15 analyst estimates compiled by Bloomberg.

News Corp. projects operating income will rise about 15 percent this year, up from a forecast of more than 10 percent previously. Murdoch has used the top-rated cable news and broadcast TV networks to increase advertising sales and the fees that cable operators pay to carry News Corp. channels. An advertising agreement with Google Inc. is increasing sales at MySpace, the most-popular social-networking Web site.

``It's far and away the fastest-growing company in the media business in revenue,'' Larry Haverty, a fund manager at Rye, New York-based Gamco Investors Inc., said in an interview with Bloomberg Television. ``The cable networks are in a very, very strong position. The TV business is a lot stronger than you think it would be economically.''

News Corp. won't bid for Yahoo! Inc. or Time Warner Inc.'s AOL, Murdoch said today on a conference call. The company isn't considering acquisitions ``of significance,'' he said.

BSkyB Write-Off

Profit missed the 28-cent average of 10 analysts' estimates compiled by Bloomberg. Results were hurt by a loss of $50 million as British Sky Broadcasting Group PLC, 39 percent owned by News Corp., wrote down its investment in ITV, the U.K.'s biggest commercial broadcaster. The unit contributed a $249 million profit a year earlier.

Haverty called the loss ``a transitory problem.'' He helps manage $30 billion in assets, including almost 15 million News Corp. shares.

News Corp. said operating income rose 24 percent to $1.42 billion from the previous year. The company's Class A shares, down 17 percent in the past year, fell 6 cents to $19.35 at 4:01 p.m. in New York Stock Exchange composite trading.

During the quarter, Murdoch, 76, completed the $5.2 billion purchase of Dow Jones & Co. The acquisition added the Wall Street Journal, MarketWatch and the Factiva data service to New York-based News Corp.'s more than 110 newspapers, film and television studios, and the Fox television networks.

``I'm tremendously impressed with the quality of assets we've acquired,'' Murdoch said of Dow Jones. ``We are only at the beginning.''

Cable Networks

Cable network sales rose 34 percent to $1.24 billion on higher fees collected by Fox News, while operating income jumped 23 percent to $337 million. News Corp. gets about 25 percent of its revenue from U.S. TV ad sales including cable and broadcast, Murdoch said on the call.

``If you took out the ITV charge, it was a solid quarter,'' said David Bank, an analyst at RBC Capital Markets in New York. He has an ``outperform'' rating on News Corp. shares and doesn't own any. ``The guidance increase was nice.''

Operating income at the television unit more than doubled to $245 million because of advertising gains at the Fox network. Sales fell because of lower Major League Baseball revenue and fewer political ads at local stations.

MySpace

The division that includes MySpace increased sales by 54 percent to $798 million, buoyed by ad revenue from the site. Operating profit jumped 23-fold to $23 million. Murdoch led the $580 million purchase of MySpace in 2005, betting the world's most popular social-networking Web site could be a magnet for advertisers.

Sky Italia, the pay television service, has added 400,000 subscribers in the past year, increasing sales by 25 percent. That led to a $62 million operating profit, compared with a loss a year earlier.

Profit at the film unit declined 14 percent to $403 million and sales dropped 13 percent to $1.98 billion. Last year's results were bolstered by ``Little Miss Sunshine'' and ``Borat'' while this quarter's included the costs of releasing ``Alvin and the Chipmunks'' and ``Juno.''

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

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and information.

With last night's Super Bowl broadcast, watched by a record 97.5 million viewers, and the ``American Idol'' reality series, News Corp. has two weapons that competitors don't have for weathering the Hollywood writers strike.

Chief Operating Officer Peter Chernin said on the call talks with writers were yielding progress.

In the current U.S. television season, Fox leads in viewers ages 18 to 49, those most prized by advertisers, and is second behind CBS in total viewership, according to Nielsen Media Research.

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

Last Updated: February 4, 2008 18:50 EST