Buffeted by a steep drop in ad revenue, the media giant reports an 8.4 percent drop in quarterly revenues and a net loss as it fails to meet Wall Street expectations.
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 its "other" category, 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 MySpace Music. Additional contributing factors included a growth in unique users and an internal expansion of Fox Interactive.