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| Share Price: 796.50 | Bid: 796.00 | Ask: 796.50 | Change: -2.00 (-0.25%) |  | ||||||
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Write-downs push News Corp into quarterly loss
Thu, 9th Aug 2012 10:24
Media giant News Corp, the media empire under the control of Rupert Murdoch, suffered a quarterly loss after being hit with the costs of a write-down of its Australian publishing business.
The charge, which resulted from falling revenue advertising, consisted of a write-down of $1.5bn of goodwill and a $1.3bn write-down of assets (indefinite-lived intangibles).
The loss for the quarter ended June 30th was $1.6bn, equal to $0.64 per share, against net income of $683m, equal to $0.26 per share, reported in the prior year quarter. Income was also offset by a restructuring charge mainly related to the company's publishing businesses, as well as $15m of pre-tax losses in its Other sector, which includes a loss on the sale of property in the UK.
This was partially offset by a $115m pre-tax gain from the company's participation in the BSkyB share repurchase programme.
Excluding the write-downs, the firm made a proft per share of 32 cents, which was in line with the consensus expectations of analysts in a survey conducted by Bloomberg.
Revenues also declined somewhat, coming in at $8,370m compared to $8,962m the same period the previous year.
During the quarter, Cable Network Programming reported quarterly operating income of $792m, a $161m, or 26%, increase over the prior year quarter, driven by a 15% increase in revenue. On a full-year basis, it posted annual operating income of $3.3bn, a $535m, or 19%, increase over the prior year, pushed higher by a 14% increase in revenue.
The Filmed Entertainment sector saw full year operating income increase $205m, or 22%, over the prior year to $1.1bn, while quarterly operating income was $120m, compared to $210m reported in the same period a year ago. The $90m decline was the result of lower theatrical and home entertainment revenues due to the timing, in the prior year quarter, of the successful worldwide theatrical performance of Rio and the performance of two other films.
Television reported quarterly operating income of $213m, a decrease of $20m versus the same period a year ago, and full-year operating income of $706m, increased $25m versus a year ago.
Publishing posted annual operating income of $597, a $267m decrease compared to the $864m reported a year ago, which included a $125m litigation settlement charge at the integrated marketing services business. Quarterly segment operating income was $139m, a $131m decrease compared to the $270m reported in the same period a year ago, reflecting lower advertising revenues at the international newspapers and integrated marketing services business.
According to Bloomberg, Chief Operating Officer Chase Carey said: "Publishing will continue to be mixed. We certainly have initiatives to improve on execution, and we have an ongoing focus on being as efficient as we can be. There will be revenue growth."
In a bid to boost publishing figures, the company is planning to launch a new UK tabloid to take the place of News of the World, and has already increased the cost of its Sun newspaper.
Earlier this year the company unveiled plans to split its entertainment and publishing businesses.
Chairman and Chief Executive Officer Rupert Murdoch said: "We are proud of the full-year financial growth achieved over the last twelve months, led by our Cable Network Programming and Filmed Entertainment segments. Not only did we execute on our operating plan and deliver on our financial targets, we returned over $5bn to shareholders through an aggressive buyback program and dividends.
"In addition, significant progress has been made in opportunistically addressing the company's non-consolidated assets, as demonstrated by the purchase of Fox Pan American Sports, the sale of NDS and the announced intention to purchase the remaining ownership stake of ESPN STAR Sports and Consolidated Media Holdings.
"We find ourselves in the middle of great change, driven by shifts in technology, consumer behavior, advertiser demands and economic uncertainty and change brings about great opportunity. News Corporation is in a strong operational, strategic and financial position, which should only be enhanced by the proposed separation of the media and entertainment and publishing businesses."
Cash at the end of the period declined to $9,626m from $12,680m at the same date the previous year.
NR
The charge, which resulted from falling revenue advertising, consisted of a write-down of $1.5bn of goodwill and a $1.3bn write-down of assets (indefinite-lived intangibles).
The loss for the quarter ended June 30th was $1.6bn, equal to $0.64 per share, against net income of $683m, equal to $0.26 per share, reported in the prior year quarter. Income was also offset by a restructuring charge mainly related to the company's publishing businesses, as well as $15m of pre-tax losses in its Other sector, which includes a loss on the sale of property in the UK.
This was partially offset by a $115m pre-tax gain from the company's participation in the BSkyB share repurchase programme.
Excluding the write-downs, the firm made a proft per share of 32 cents, which was in line with the consensus expectations of analysts in a survey conducted by Bloomberg.
Revenues also declined somewhat, coming in at $8,370m compared to $8,962m the same period the previous year.
During the quarter, Cable Network Programming reported quarterly operating income of $792m, a $161m, or 26%, increase over the prior year quarter, driven by a 15% increase in revenue. On a full-year basis, it posted annual operating income of $3.3bn, a $535m, or 19%, increase over the prior year, pushed higher by a 14% increase in revenue.
The Filmed Entertainment sector saw full year operating income increase $205m, or 22%, over the prior year to $1.1bn, while quarterly operating income was $120m, compared to $210m reported in the same period a year ago. The $90m decline was the result of lower theatrical and home entertainment revenues due to the timing, in the prior year quarter, of the successful worldwide theatrical performance of Rio and the performance of two other films.
Television reported quarterly operating income of $213m, a decrease of $20m versus the same period a year ago, and full-year operating income of $706m, increased $25m versus a year ago.
Publishing posted annual operating income of $597, a $267m decrease compared to the $864m reported a year ago, which included a $125m litigation settlement charge at the integrated marketing services business. Quarterly segment operating income was $139m, a $131m decrease compared to the $270m reported in the same period a year ago, reflecting lower advertising revenues at the international newspapers and integrated marketing services business.
According to Bloomberg, Chief Operating Officer Chase Carey said: "Publishing will continue to be mixed. We certainly have initiatives to improve on execution, and we have an ongoing focus on being as efficient as we can be. There will be revenue growth."
In a bid to boost publishing figures, the company is planning to launch a new UK tabloid to take the place of News of the World, and has already increased the cost of its Sun newspaper.
Earlier this year the company unveiled plans to split its entertainment and publishing businesses.
Chairman and Chief Executive Officer Rupert Murdoch said: "We are proud of the full-year financial growth achieved over the last twelve months, led by our Cable Network Programming and Filmed Entertainment segments. Not only did we execute on our operating plan and deliver on our financial targets, we returned over $5bn to shareholders through an aggressive buyback program and dividends.
"In addition, significant progress has been made in opportunistically addressing the company's non-consolidated assets, as demonstrated by the purchase of Fox Pan American Sports, the sale of NDS and the announced intention to purchase the remaining ownership stake of ESPN STAR Sports and Consolidated Media Holdings.
"We find ourselves in the middle of great change, driven by shifts in technology, consumer behavior, advertiser demands and economic uncertainty and change brings about great opportunity. News Corporation is in a strong operational, strategic and financial position, which should only be enhanced by the proposed separation of the media and entertainment and publishing businesses."
Cash at the end of the period declined to $9,626m from $12,680m at the same date the previous year.
NR
London close: Stocks settle higher after mixed batch of data
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FTSE 100 movers: Experian, IMI, BSkyB, ENRC
Credit checking giant Experian topped the FTSE Thursday after reporting full-year sales growth across all its global markets, particularly in Latin and North America. In the year to end-March, the company saw revenues from continuing activities rise six per cent to 4.7bn dollars, with earnings before interest and tax up seven per cent to 1.25bn dollars.[9 May '13]
Sky raises equity investment in streaming provider Roku
FTSE 100-listed British Sky Broadcasting group has made a further 1.9m dollar equity investment in Roku, a platform which delivers over-the-top services via its streaming devices.[9 May '13]
London midday: Markets subdued as eyes turn to ECB
Markets were trading within a narrow range on Thursday as traders refrained from taking risk ahead of a potential rate cut from the European Central Bank (ECB) this afternoon.[2 May '13]
London open: Markets cautious ahead of ECB decision
The FTSE 100 was in the red in early trading on Thursday as nerves set in ahead of the all-important European Central Bank (ECB) policy decision later on.[2 May '13]
BSkyB earnings growth slows in post-Christmas lull
Earnings growth slowed slightly for British Sky Broadcasting in its traditionally quiet post-Christmas period, although customer numbers and average revenue per user continued to grow.[2 May '13]
Wednesday broker round-up UPDATE
Archipelago Resources: Canaccord Genuity lowers target price from 75p to 68p keeping a buy recommendation.[24 Apr '13]
London close: Stocks weighed down by Eurozone concerns
Political wrangling in Italy and uncertainty in Cyprus resulted in a volatile day for London's FTSE 100 index on Wednesday, though stocks bounced well off their lows in afternoon trade.[27 Mar '13]
