News Corp. Reports Q4, Year-End Losses

NEW YORK: Impairment charges resulted in News Corporation posting a loss of $203 million for the fourth quarter and $3.4 billion for a year that Rupert Murdoch called the company’s "most difficult in recent history."

Murdoch, chairman and CEO of the company, continued: "Our 2009 financial performance clearly reflects the weak economic environment that we confronted throughout the year. We streamlined all our businesses and continue to do so, at the same time adjusting to the revolutionary changes taking place throughout the media industry. This has presented us with many challenges and also opportunities. We have strengthened our franchises and are particularly well placed for the coming recovery. Nearly all our businesses have improved market share. Particular progress has been made in cable network programming. I am certain that News Corporation is poised to profit, and deliver strong returns, as the economy rebounds."

The company said its full-year loss of $3.4 billion, as compared with a year-ago profit of $5.4 billion, reflected lower operating results, an $8.9 billion pre-tax non-cash impairment charged related to goodwill and intangible assets, and $312 million in restructuring charges. The Q4 loss of $203 million—from a $1.1 billion profit last year–stemmed from $680 million in operating charges, primarily at Fox Interactive Media. 

Revenues for the year totaled $30.4 billion, down from $33 billion, with an operating loss of $5.65 billion. For the quarter, revenues fell from $8.6 billion to $7.7 billion, with an operating income of $268 million.

In filmed entertainment, operating income fell 8 percent to $203 million in the quarter on revenues of $1.7 billion, which were 13 percent higher than the year-ago period. The decline in operating income was attributed to lower library product contributions from Twentieth Century Fox Television. Highlights for the segment, however, included home-entertainment revenues from Taken and Slumdog Millionaire, among others. For the year, revenues were down 11.3 percent to $5.9 billion, with operating income that fell almost 32 percent. News Corp. cited difficult prior-year comparisons, when releases include The Simpsons Movie and Live Free or Die Hard.

Television revenues in the quarter fell 19.2 percent to $1.1 billion, while operating income plummeted from $279 million to $95 million. And in the year, operating income was down 85 percent to $174 million on revenues that fell 20.7 percent to $4.6 billion. Both decreases were the result of reductions at the Fox Television Stations, FOX Broadcasting and STAR.

Cable network programming, was up both in the quarter and the year; there was an 8-percent revenue increase in the quarter to $1.5 billion and a 11.8-percent increase in the year to $5.6 billion. Operating income rose to $434 million for the quarter and $1.7 billion for the year.  FOX News Channel was a driver, as well as the Fox International Channels.

SKY Italia’s operating income fell in the quarter to $155 million and in the year to $393 million, on revenues of $945 million and $3.8 billion, respectively. The DTH platform added 235,000 subs in the year to reach 4.8 million.