News Corp's $6.4B loss - job cuts loom
The media empire misses estimates, and CEO Rupert Murdoch expects the company to 'reduce head count where appropriate.'
NEW YORK (Reuters) -- Rupert Murdoch's News Corp. reported a quarterly net loss because of an $8.4 billion writedown on Dow Jones and other assets, as the recession dragged down advertising revenue.
Excluding the impairment charge, the media conglomerate said Thursday its profit was 12 cents per share for the fiscal second quarter ended Dec. 31, missing the average analyst forecast of 19 cents, according to Reuters Estimates.
Shares of News Corp (NWS, Fortune 500) fell 2% to $6.79 in after-hours trading, from their Nasdaq close of $6.94.
"While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought," Murdoch, the company's chairman and chief executive, said in a statement. "We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate."
News Corp's net loss was $6.41 billion, or $2.45 a share, compared with net income of $832 million, or 27 cents a share, in the year-ago quarter.
The international media conglomerate said that operating income, adjusted for special items, was $818 million, down 42% from $1.4 billion a year ago.
Revenue fell 8.4% to $7.87 billion, compared with the average Wall Street forecast of $8.35 billion.
News Corp is the latest media conglomerate to report gloomy financial results as advertisers slash their budgets in the weak economy.
This week, Time Warner Inc (TWX, Fortune 500) posted a $16 billion quarterly net loss because of a writedown, and Walt Disney Co (DIS, Fortune 500) posted a sharply lower-than-expected profit in part because of poor TV ad and DVD sales.
News Corp. owns the Fox television network, Wall Street Journal parent company Dow Jones & Co., the MySpace online social network, newspapers throughout the United States, Britain and Australia, and satellite TV network Sky Italia.
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