Friday, February 6, 2009

News Corp. Loses $6.4 Billion in Recent Quarter

News Corp., Rupert Murdoch's media giant that owns FOX and The Wall Street Journal, said Thursday it lost $6.4 billion in its most recent quarter because of a massive write-down in the value of its assets. It predicted a 30 percent drop in operating profits for the fiscal year to June from a year ago, when it earned $5.13 billion.

Ryan Nakashima of The Associated Press reported last night:

Analyst David Bank of RBC Capital Markets said Wall Street was expecting the bad news given similar announcements by other media companies.

"It was bad, but it wasn't out of left field," Bank said. "It was probably more of a confirmation of what we expected rather than a new set of information."

Murdoch, the chief executive who controls more than a third of the company's shares, blamed the bleak outlook on falling advertising revenue and the impact of weak consumer sentiment on DVD and book sales.

He told analysts the results were "a direct reflection of the recession that is deeper than anyone predicted" and called it the worst global economic crisis News Corp. had seen since its founding more than 50 years ago.

"We are doing everything we possibly can to position ourselves to emerge stronger when the economy returns to some semblance of normalcy," he said.

News Corp. also said it had cut 800 positions across its Fox properties, including the 20th Century Fox movie studio, in moves that it expected to save $400 million a year. The Wall Street Journal said Thursday it is cutting about two dozen newsroom positions.

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