Another division having problems is television. Operating income plummeted more than 50% for this segment. The Fox broadcasting network, as well as the Fox stations, didn't do so well, and while I acknowledge the rough advertising climate as a factor, I also have to highlight management's statement regarding the negative impact of higher programming costs and license fees. News Corp., like other media companies, continues to allow producers to charge way too much for content, in my opinion.

News Corp. had a great first quarter when it came to movies. The computer cartoon Ice Age: Dawn of the Dinosaurs was a huge global hit, grossing more than $880 million in all theatrical markets. That project, along with the release of the latest X-Men picture on home video, drove a 56% increase in operating income for the film division. And cable networks did great business, thanks in part, as always, to Fox News Channel.

Overall, I think News Corp. did a good job in the first quarter. Not only did earnings grow, but cash flow expanded quite a bit, too. I hope management can keep the momentum going, but News Corp. simply must fix its major broadcasting asset.

Shares reacted favorably in yesterday's after-hours session, rising 3% on the earnings release. News Corp. isn't the first investment idea I think of when I consider the media sector, but I believe the stock could be a buy if it shows strength over the next several sessions as the market digests all the details of the quarter. So, my strategy would be to avoid buying today, especially if the after-hours excitement carries over into the regular session. Wait for more information on the price action.

Disclosure: I own Disney, GE; positions can change without notice.