News Corp. Reports 4th-Qtr. Loss, Expects Fiscal 2002 Profit to Rise 20%16 Aug, 2001 By: Hive News
Sydney-based News Corp. projects fiscal 2002 operating profit to increase 20%, sparked by higher revenues at cable-TV networks such as Fox News Channel. The Rupert Murdoch-led media empire reported afourth-quarter loss on lower sales of filmed entertainment, magazines andnewspapers, said a Bloomberg News report.
The company predicts operating profit of $2 billion to $2.1 billion in the year ending June 30, assuming a modest recovery in advertising sales, c.f.o. David Devoe said on aconference call. Operating profit for cable TV is expected to more than double on higher advertising and subscriber growth.
In fiscal 2002, the company expects revenue at Fox News Channel to rise more than 40% and profit at the film and TV production unit to increase 35%. The recent purchase of Chris-Craft Industries Inc., which gave it TV stations in nine of the top 10 markets, will boost results, News Corp. said.
Murdoch said on the call that News Corp.'s offer to acquire the DirecTV satellite-broadcast operation from General Motors Corp.'s Hughes Electronics Corp. includes a "healthy" premium. News Corp. has been in talks to gain control of the unit. Two weeks ago, rival EchoStar Communications Corp. made a $32.3 billion stock and assumed debt offer for DirecTV.
News Corp. reported a fiscal fourth-quarter loss as revenue at filmed entertainment, magazines and newspapers fell by about 20%. The loss was $265 million, or 26 cents an American depositary receipt, in thequarter ended June 30, compared with a profit of $71 million, or 6 cents, in theyear-earlier quarter, the company said in a statement.
Revenue fell 12% to $3.44 billion from $3.9 billion.
Filmed entertainment sales fell to $937 million from $1.19 billion, and televisionrevenue fell to $926 million from $953 million. Revenue from magazines fell to $213 million from $264 million, and revenue at newspapers fell to $585 million from $750 million.
Operating income at its TV business fell to $185 million from $241 million, andoperating income at its newspaper division fell to $121 million from $161 million, according to Bloomberg.
The Filmed Entertainment segment reported a fourth quarter operating loss of $4 million, a $49 million improvement over the operating loss of $53 million reported in the same period a year ago. According to a News Corp. press release, these improved results were driven by the continued success of X-Men in ancillary film windows as well as the strong video and DVD performance of Cast Away, which more than offset new release marketing costs for several summer releases. Results from the prior year included the disappointing performance of Titan A.E., as well as charges related to the shutdown of the Fox Animation Studios, which more than offset the strong theatrical performance of Big Momma's House.
For the year, Filmed Entertainment reported operating profit of $271 million, which was $152 million higher than a year-ago. The improvement was primarily due to the strong theatrical and home video performances of current year releases such as X-Men and Cast Away as well as significant worldwide library contributions. The majority of earnings from successful summer releases Moulin Rouge and Dr. Dolittle 2, as well as the profits from July releases Kiss of the Dragon and Planet of the Apes, which since it's opening on July 27th has generated more than $150 million in domestic box office receipts, will be recognized in fiscal 2002.