News Corp. Cuts Profit Forecast After Quarterly Loss
Operating income will fall about 30 percent in the year ending in June, more than a November forecast of a percentage drop in the "low to mid teens," the New York-based company said today on its earnings conference call.
"The downturn is more severe and likely longer lasting than previously thought," Chief Executive Officer Murdoch said in a statement. The company is implementing "rigorous cost-cutting," including "major" expense reductions at local TVs, he said on the call.
The global recession is reducing ad sales at News Corp.’s Fox TV stations and newspapers including the Wall Street Journal, bought by Murdoch in December 2007 as part of the $5.2 billion acquisition of Dow Jones & Co. Operating income slumped 8.7 percent at the newspaper unit and 93 percent at the TV stations.
The company recorded an impairment charge of $8.4 billion before taxes in fiscal second quarter to reflect the declining value of its TV, newspaper and other assets. Excluding the impairment, profit fell to 12 cents a share. Analysts projected 19 cents, the average of 19 estimates compiled by Bloomberg.
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