News Corp, billionaire Rupert Murdoch's media company, reported a US$1.55 billion ($1.9 billion) fourth-quarter loss after writing down the value of Australian newspapers and other parts of its global publishing empire.
The net loss was 64 US cents a share, compared with net income of US$683 million, or 26 cents, a year earlier, the New York-based company said today in a statement.
Excluding the writedowns and other items, profit was 32 cents a share, in line with the average analyst estimates. Revenue fell 6.7 per cent to US$8.4b during the quarter.
News Corp fell as much as 4.2 per cent to US$22.72 in extended trading after the report. The shares had surged 33 per cent this year, bolstered by the plan to break up the company.
The company reported pre-tax write-downs of US$2.9b in the fourth quarter, "principally related to the company's publishing businesses, most significantly the Australian operations".
The spinoff of the publishing business from the movie studios and broadcasting divisions should take about a year to complete, the company said in June. While the remaining entertainment company will continue to be led by US-based Mr Murdoch, the board has yet to designate a chief executive officer for the publishing side.
Advertising falls at Australian and UK newspapers continued hit profitability in publishing - the core of the company's publishing spin-off.
Chief operating officer Chase Carey suggested there were substantial costs still to be cut out of the Australian business, saying this would happen in coming months after the overhaul of management in the first half of 2012.
The majority of News Corp's value comes from its entertainment operations, which include the Fox News cable network and Twentieth Century Fox film studio. In June, Murdoch announced a plan to split off the declining publishing division, home to the Wall Street Journal in the US, the Sun newspaper in the UK and the company's Australian operations, into a separate public company.
Annual publishing profit fell 31 per cent to US$597m, partly because of shrinking advertising revenue at the Australian newspapers as well as the closure of the News of the World newspaper, the company said.
The result was also affected by the absence of contributions from The News of The World, the British tabloid closed after the hacking scandal escalated last year. Excluding a one-off litigation charge, operating income slumped US$392m for the year.
At its cable networks, operating profit rose 26 per cent on a 16 per cent increase in affiliate fee revenue from cable, phone and satellite TV distributors. Advertising revenue at its domestic cable channels rose 5 per cent.
Operating income at the company's movie unit fell 43 per cent to US$120m. Fox Broadcasting also saw operating income fall 8.5 per cent to US$213m.
News Corp owns Fox Broadcasting in the United States, the FX and Fox News cable networks, and such newspapers as The Wall Street Journal and The Sun in the UK. It is also parent of the Twentieth Century Fox studios.
- Reuters, with Kirsty Simpson of BusinessDay.com.au