Fri, Nov 04, 2011 - Page 10 News List

Q1 profits at News Corp fall following scandal charges

BAD DREAMS:Vanity Fair claims Rupert Murdoch told his son James to take leave from the firm, only to change his mind after having a bad night’s sleep


News Corp saw net income for its fiscal first quarter fall 5 percent from a year ago as a result of the cost of closing the scandal-wracked News of the World tabloid and dropping its takeover bid for British Sky Broadcasting.

The media conglomerate, controlled by chief executive Rupert Murdoch, is under fire for phone hacking in Britain.

Net income in the July through September period fell from US$775 million, or US$0.30 per share a year ago to US$738 million, or US$0.28 per share now.

Absent about US$221 million in special charges, including US$91 million in restructuring costs linked to the UK newspaper business, adjusted earnings came to US$0.32 per share, beating the US$0.29 expected by analysts polled by FactSet.

Revenue grew 7 percent to US$7.96 billion, helped by higher fees for pay TV channels like Fox News and the successful movie Rise of the Planet of the Apes. That also beat the US$7.63 billion expected by analysts.

Advertising at its domestic pay TV channels such as FX grew 13 percent in the quarter.

The company said it remains on track to increase its adjusted operating income in the fiscal year through next June by “low to mid-teen” percentages from the US$4.98 billion it posted last year.

Murdoch, the 80-year-old chief executive who controls News Corp through a family trust that owns nearly 40 percent of the voting shares, did not appear on a conference call to take questions from analysts and journalists.

Earlier on Wednesday, Vanity Fair previewed an article which said Rupert Murdoch had asked his son James, the company’s heir apparent, to take a leave of absence amid the phone hacking scandal this summer, before changing his mind after a sleepless night.

The story appears in Vanity Fair’s issue for next month, which hit newsstands yesterday.

News Corp chief operating officer Chase Carey said on Wednesday that the company had no plans to oust James Murdoch, who is currently No. 3 at the company as its deputy chief operating officer.

“We have great confidence in James,” Carey said. “James has done a good job and we are not contemplating any changes.”

However, Carey said that the board takes “seriously” a protest vote that saw a majority of voting shareholders who are not affiliated with the family cast ballots against the re-election of Murdoch’s sons James and Lachlan to the board.

“The board continues to evolve,” he said. “We’re proactively looking for feedback from our shareholders.”

This story has been viewed 2178 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top