Buffeted by a steep drop in its advertising revenues, News Corp. on Thursday reported an 8.4 percent decline in its fiscal second quarter revenues and missed analysts expectations.
Revenues fell to $7.9 billion in the quarter ended December 31, compared with $8.6 billion for the same quarter a year ago. Wall Street was expecting the media giant to generate $8.39 billion, according to Thomson Reuters.News Corp. posted a net loss of $6.4 billion, or $2.45 a share, during the quarter, compared with a net profit of $832 million, or 27 cents a share, a year earlier.
Excluding impairment charges, the company generated a net profit of 12 cents a share. Analysts, however, were expecting the media giant to post a profit of 19 cents a share, according to Thomson Reuters.
News Corp. CEO Rupert Murdoch said in a statement:
Our results for the quarter are a direct reflection of the grim economic climate. While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought.
As a result, we have been taking actions to preserve a solid level of operational profitability and a strong balance sheet without sacrificing future growth. We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate.
News Corp. shares were up 2.01 percent in after-hours trading to $7.60 a share. During the regular trading session, News Corp. posted a gain of 2.76 percent to $7.45 a share.
During the quarter, News Corp. reported an adjusted operating loss of $38 million from, which includes Fox Interactive Media, as well as Fox's MySpace site. The decline in Fox Interactive was spurred on by, in part, by its launch of . Additional contributing factors included a growth in unique users and an internal expansion of Fox Interactive.