News Corp., billionaire Rupert Murdoch's media company, reported a $1.55 billion quarterly loss after writing down the value of Australian newspapers and other parts of its global publishing empire.
News Corp. Posts Loss After Writing Down Publishing Business
The net loss was 64 cents a share, compared with net income of $683 million, or 26 cents, a year earlier, the New York-based company said in a statement. Excluding the write-downs and other items, profit was 32 cents a share, in line with the average analyst estimate compiled by Bloomberg.
The majority of News Corp.'s value comes from its entertainment operations, which include the Fox News cable network and Twentieth Century Fox film studio. In June, Mr. Murdoch announced a plan to split off the declining publishing division, home to the Wall Street Journal in the U.S. and the Sun newspaper in the U.K., into a separate public company.
Publishing profit over the year ending in June fell 31% to $597 million, partly because of shrinking advertising revenue at the Australian newspapers as well as the closure of the News of the World newspaper, the company said.
News Corp. fell as much as 4.2% to $22 .72 in extended trading after the report. The shares had surged 33% this year, bolstered by the plan to break up the company.
The company reported write-downs of $2.8 billion in the fourth quarter, "principally related to the company's publishing businesses, most significantly the Australian operations," he said.
The spinoff of the publishing business should take about a year to complete, the company said in June. While the remaining entertainment company will continue to be led by Mr. Murdoch, the board has yet to designate a chief executive officer for the publishing side.
Revenue fell 6.6% to $8.37 billion in the quarter, which ended June 30. Analysts had estimated $8.72 billion.
News Corp. has been trying to move past a hacking scandal that erupted last year after reports that a News Corp. newspaper in the U.K. accessed the voice mail of a murdered teenager, Milly Dowler. Rebekah Brooks, the former head of the company's British division, was charged by London police this month for her part in those alleged crimes.
The scandal prompted News Corp. to abandon its bid to buy the remaining stake in British Sky Broadcasting. A U.K. committee, after probing whether News Corp. misled Parliament during the hacking scandal, concluded in May that Mr. Murdoch is "not a fit person to exercise the stewardship of a major international company." The nation's media regulatory commission, called Ofcom, may force News Corp. to sell or cut its 40% stake in BSkyB.
Coping with the scandal's fallout has cost News Corp. about $315 million since it broke in July 2011. That includes legal fees, settlements and losses from closing the News of the World newspaper.
The company adopted a $5 billion buyback plan in the wake of the scandal and doubled the size of the program in May.
-- Bloomberg News --