News Corp. Posts Loss

By: Seth Sutel, AP Business Writer (AP) News Corp. reported a $265 million loss Thursday due to write-downs from several failed investments. Revenues and operating results also fell in the latest quarter as a poor advertising climate knocked the wind out of the company's television and newspaper businesses.

Speaking to reporters on a conference call, Rupert Murdoch, the company's chairman and chief executive, also lashed out at critics of his longstanding bid to acquire Hughes Electronics Corp., owner of the major U.S. satellite broadcaster DirecTV.

Murdoch said assumptions that his offer would provide no premium to shareholders or synergies with his own satellite operations were "dead wrong." Murdoch's long delayed bid for DirecTV received a challenge earlier this month from rival satellite broadcaster EchoStar Communications Corp., which runs the Dish network.

Murdoch declined to discuss specific details of his proposal, citing legal limits on how much he can disclose without a deal in place. "We have no definitive agreement yet, so it's been impossible for us to engage in this debate," he said.

Reporting results for its fourth fiscal quarter, which ended June 30, News Corp. said a series of writeoffs resulted in a one-time charge of $410 million. The company cited write-downs in One.Tel, a failed Australian telecom company, 360networks, a Canadian optical network provider, Indian cable network Zee Telefilms, and ePartners, a News Corp. venture capital fund that has ceased making new investments.

Excluding one-time effects, the company's operating profits fell 21% to $145 million from $184 million in the same period a year ago, or 12 cents per U.S.-listed share versus 18 cents. The results beat the recently lowered analysts expectations of 11 cents by a penny, according to Thomson Financial/First Call.

Revenues were off 12% to $3.44 billion from $3.90 billion.

News Corp.'s shares were off 30 cents at $35.50 in midday trading on the New York Stock Exchange.

As expected, the company's advertising-driven business took a hit from a slowdown that has been affecting all media companies. Operating income was off 23% from television and down 25% in newspapers, which include the New York Post, The Sun, in Britain and many papers in Murdoch's native Australia.

In television, earnings from the Fox broadcast network were essentially flat from the same period a year ago as a drop-off in ad spending and higher sports programming costs were offset by lower network program costs as Fox substituted expensive shows like "Beverly Hills 90120" with newer shows like "Boston Public."

The company's own local television stations couldn't escape the effects of the soft ad market, however. Earnings at that division tumbled 29% from the same period a year ago.

The operating loss at News Corp.'s film and TV production business narrowed to $4 million from $53 million a year ago, when results took a hit from the box office bomb "Titan A.E." and the shutdown of an animation studio.

For its full fiscal year, News Corp. reported a net loss of $445 million, which included one-time losses of $1.136 billion. In addition to the fourth quarter's charge of $410 million, the full-year losses also include a first-quarter charge of another $410 million as the company adopted new accounting rules for valuing its film inventory.

In the same full-year period a year ago, News Corp. earned $1.123 billion. Excluding charges and one-time gains in both periods, full-year earnings fell 13% to $691 million from $794 million, or 64 cents a share versus 77 cents a share.

Revenues for fiscal 2001 fell 2% to $13.8 billion from $14.15 billion.

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