By: Seth Sutel, AP Business Writer (AP) News Corp., the media conglomerate controlled by Rupert Murdoch, reported a net loss of $1.74 billion in the latest quarter because of another write-down in its stake in the troubled Gemstar-TV Guide International Inc.
News Corp., whose holdings include the Fox broadcast network, Fox News Channel, the
New York Post, and newspapers in Australia and England, wrote off $1.9 billion of its stake in Gemstar because of a further decline in the company's stock.
News Corp. had already taken a $4.23 billion write-off related to Gemstar in its previous quarter. Gemstar, which publishes
TV Guide, has been struggling with disputes over patents related to its on-screen programming guides and concerns over the company's accounting and management.
News Corp.'s net loss for its fourth fiscal quarter ending June 30 was equivalent to $1.40 per share and compared with a net loss of $265 million or 26 cents per share in the same period a year ago.
Revenues grew, and the company said it was seeing improvement in advertising despite a "sluggish" start to its fiscal year amid "extremely difficult operating conditions."
Without the effect of the Gemstar write-down and other one-time items, News Corp.'s earnings fell to $114 million or 8 cents per share, compared with $145 million or 12 cents per share in the same period a year ago.
The latest results were below analysts' estimates of 15 cents per share, according to Thomson First Call, and included for the first time results from Stream, an Italian TV operation. The results also reflected losses from currency fluctuations in Latin America, where News Corp. has satellite TV holdings.
Revenues rose 11% to $3.83 billion from $3.44 billion in the same period a year ago. Operating earnings at its main businesses, which include the Fox network, cable, newspapers, and the HarperCollins book publisher, rose 25% to $452 million from $361 million. That figure does not include holdings in BSkyB, STAR, and other satellite TV operations.
Results at News Corp.' Fox Entertainment Group, which includes its main U.S. entertainment properties, were better than analysts had been expecting. News Corp.'s shares were up 30 cents at $21.05 in early trading on the New York Stock Exchange.
Murdoch, the company's chairman and chief executive, told investors on a conference call that he intended to certify the company's financial results in accordance with a directive from the Securities and Exchange Commission.
News Corp. continues to be dogged by its stake in Gemstar, the publisher of
TV Guide. Gemstar suffered its latest setback in July when a federal judge ruled that EchoStar Communications Corp. was not infringing on three patents held by Gemstar, its second legal defeat in two weeks.
News Corp. installed one of its own executives, Jeff Shell, as chief operating officer of Gemstar in April. Murdoch said the company was "working closely" with Gemstar's management and would take "necessary steps" to restore Gemstar's value.
Rumors have been circulating that Murdoch would like to replace Gemstar's founder Henry Yuen as chief executive. In a conference call with reporters, Murdoch declined to say what steps the company would take to get Gemstar back on track.
For the company's full fiscal year, News Corp. reported a net loss of $6.27 billion or $5.09 per share, which included the Gemstar loss as well as write-downs related to its U.S. sports broadcasting contracts and investments in Stream and the troubled German media company Kirch Media. In its previous fiscal year the company reported a net loss of $445 million or 46 cents a share.
Full-year revenues were $15.2 billion versus $13.8 billion.
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