Hit by an asset write-down of $809 million, Rupert Murdoch’s News Corporation posted a $606m loss for its fiscal second quarter.
The deficit is far wider than in Q2 a year before, when the media mammoth was a mere $23m into the red following a $293m write-down.
Behind the latest loss are US broadcast deals with the National Football League, Major League Baseball and Nascar racing. The ad slowdown has hit the value of all three investments, hence the write-down.
“We’ve reassessed the prospects for advertising for the coming four years,” said Murdoch. “When all of these contracts were set, we were working under the assumption that business conditions would not only remain where they were but continue to improve.”
Excluding the write-down, NewsCorp reported $203m profits, a 25% slide from the $270m a year earlier. However, sales rose 7% over the same period, from $3.85 billion to $4.12bn.
Continued weakness in the ad market prompted NewsCorp to cut forecasts again for its full fiscal year. Operating profits (omitting interest and taxes) are now predicted to increase by a percentage margin in the mid-single digit range, compared with the high single digit / low double digit forecast in October [WAMN: 03-Oct-01].
Data sourced from: New York Times; additional content by WARC staff