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| News Corp posts Q4 loss of $1.55 b |
| News Corp posts Q4 loss of $1.55 billion
|
| UNITED STATES OF AMERICA
, 9-August-2012
1:31:36 AM |
| News Corp. posted a $1.55 billion loss in the fourth quarter after booking a large write-down on its publishing assets as it prepares to spin the unit off into a separate company.
The $2.9 billion write-down was largely related to the publishing assets' declining value.
The unit has borne heavy legal costs related to U.K. investigations of a phone hacking scandal. Its British tabloid, News of the World, was closed in July last year. Restructuring is ongoing at its Australian newspapers and at its advertising insert group, News America Marketing. Both divisions face "challenging pressures that will adversely impact profits," chief operating officer Chase Carey told analysts.
Although the write-down was a non-cash charge, it resulted in a loss for the three-month period. News Corp.'s stock fell 82 cents, or 3.5 percent, to $22.90 in after-hours trading.
Tuna Amobi, an equity analyst with Standard & Poor's, said the accounting maneuver was a way to prepare for the spin-off and set expectations low. News Corp.'s entertainment assets, which won't be spun off, are far more profitable. They include Fox News Channel and the 20th Century Fox movie studio.
"Either way you look at it, the publishing assets are going to be the under-appreciated sibling, by far," Amobi said.
The loss for the April-June period came to 64 cents per share. That compared to net income of $683 million, or 26 cents per share, a year ago.
Excluding special charges, earnings were 32 cents per share, matching the estimate of analysts polled by FactSet.
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