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News Corp. posts $1.6-billion loss as revenue drops 7%

The fiscal fourth-quarter loss at Rupert Murdoch-controlled News Corp. reflected the declining value of its publishing businesses.

August 09, 2012|By Meg James, Los Angeles Times

News Corp. reported a nearly $1.6-billion loss in its fiscal fourth quarter, reflecting the declining value of its publishing businesses — a beleaguered unit that it intends to spin off into a separate publicly traded company next year.

For the April to June quarter, the Rupert Murdoch-controlled company reported a net loss of $1.55 billion, or 64 cents a share. That compared with a $683-million profit, or 26 cents a share, for the fourth quarter of fiscal 2011.

The quarterly results, reported Wednesday, included a $2.9-billion pre-tax impairment and restructuring charge that the company said was related to its Australian newspaper and TV operations and other publishing titles. During the quarter, the company took a $57-million charge related to costs of ongoing investigations into the bribery and phone hacking scandal that has engulfed the company's British newspaper subsidiary.

The company's publishing portfolio includes the Wall Street Journal, New York Post, Times of London and the HarperCollins book publishing house.

Excluding the charges, News Corp.'s fourth-quarter profit came in at 32 cents a share — matching analyst estimates.

News Corp. generated revenue of $8.4 billion for the quarter, a decline of 7% from the nearly $9 billion it took in during the year-earlier period. Strength at the company's key cable television networks was weighed down by issues elsewhere in the company, including sagging ratings at Fox Broadcasting Co.'s once dominant TV franchise "American Idol."

The cable television programming group, which boasts the Fox News Channel, FX and regional sports networks, once again performed as the company's all-star, generating operating income of $792 million, a 26% increase from $631 million in the year-earlier period. Advertising revenue to the domestic cable networks rose 5%. Revenue for the group was $2.5 billion.

The filmed entertainment group, which includes the 20th Century Fox film and television studios, contributed $120 million — a 43% decline from the $210 million it reported in the year-ago period. The company attributed the slump to lower theatrical and home entertainment revenues. The filmed entertainment group brought in $1.7 billion in revenue.

News Corp. previously had warned that the film group, which delivered strong results in the prior quarter, would post a "significant decline" in the fourth quarter. The company attributed the decline to marketing costs associated with two major summer releases, Ridley Scott's highly anticipated sci-fi thriller "Prometheus," released in June, and 20th Century Fox's animated film "Ice Age: Continental Drift," which hit theaters in July, during the current fiscal quarter.

The television group, which includes Fox Broadcasting and television stations, chipped in operating income of $213 million, $20 million less than the year-earlier period. Overall, the broadcasting group generated $1.1 billion in revenue, a 3% drop. The company blamed the lower revenue on plummeting "American Idol" ratings.

Operating income from the publishing group also dropped. The group provided $139 million in operating income in the fourth quarter, down 49% from the $270 million brought in a year earlier. Publishing revenue was $2 billion.

For the 2012 fiscal year, the company took $224 million in pre-tax charges related to litigation and fees to defend itself in the ongoing British tabloid scandal.

News Corp. stock fell slightly in after-market trading.

Times staff writer Dawn C. Chmielewski contributed to this report.

meg.james@latimes.com

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