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Rupert Murdoch - Source: Reuters
Media giant News Corporation has posted a $US3.4 billion ($NZ5 billion) loss on writedowns and plunging advertising revenue, but says the worst of the economic downturn may have ended.
Chairman and CEO Rupert Murdoch said he was certain that News Corp was "poised to profit, and deliver strong returns, as the economy rebounds".
News Corp said it expected its operating income to increase by a high single-digit percentage rate in 2009/10, from the company's adjusted operating income of $US3.44 billion in 2008/09.
The company also said it expected overall revenue to grow by 4% in 2009/10, while advertising revenue would be flat.
Murdoch said he believed the worst of the economic downturn may have ended, but that there were no clear signs of a fast recovery.
Murdoch also reiterated the company's plan to shift to charging readers for accessing content on News Corp's websites.
"We intend to charge for all our websites," Murdoch said.
"Quality journalism is not cheap."
Murdoch said the increase in online subscriptions at News Corp's The Wall Street Journal had proved that consumers were willing to pay for quality journalism.
News Corp's net loss in the year ended June 30 compares to a net profit of $US5.4 billion in the previous financial year.
"The last year has been one of the toughest we've faced in our history," Murdoch said.
Operating income was in line with company guidance at $US3.6 billion, down 32.5% from the $US5.3 billion adjusted operating income it reported a year ago.
Revenue was $US30 billion, down 8% from the $US33 billion reported in the previous financial year.
News Corp said the fall in operating income in the financial year just ended was the result of lower contributions at the majority of the company's businesses, which more than offset 32% growth at News's cable network division.
The company recorded an $US8.9 billion pre-tax non-cash
impairment charge and recorded charges of $US312 million, related
mainly to restructuring.
Murdoch said News Corp continued to streamline its businesses, at
the same time adjusting to revolutionary changes taking place in
the media industry.
"This has presented us with many challenges and also opportunities," Murdoch said.
"We have strengthened all 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."
News Corp reported a fourth quarter net loss of $US203 million, compared with net income of $US1.1 billion in the prior corresponding quarter.
The company posted fourth quarter operating income of $US268 million, reflecting a $US452 million pre-tax non-cash impairment charge related to goodwill.
In News Corp's segments, only in cable network programming and magazines and inserts did operating income rise in the full year.
News Corp's Australian newspapers reported fourth quarter and full year operating income falls mainly due to 18% and 10% declines in advertising revenue for the quarter and year respectively, reflecting lower display and classified advertising, especially in employment and real estate.
News Corp owns news agency Dow Jones, MySpace, 20th Century Fox movie studios, cable and satellite television broadcasters in various markets, and newspapers in Australia, the US, the UK and elsewhere.
News shares fell 31 cents in trading in Australia on Wednesday, closing at $AU14.42. Its non-voting stock fell 20 cents to $AU12.45.
