News Corp, Rupert Murdoch's media company, reported a US$1.55 billion ($1.9 billion) fourth-quarter loss after writing down the value of publishing assets hurt by scandal and shrinking advertising revenue.
The net loss was US64 cents a share, compared with net income of US$683 million, or US26 cents, a year earlier, the New York-based company said yesterday.
Excluding the writedowns and other items, profit was US32 cents a share, in line with the average analyst estimate compiled by Bloomberg.
The majority of News Corp's value comes from its entertainment operations, which include the Fox News cable network and Twentieth Century Fox film studio.
In June, Murdoch announced a plan to split off the declining publishing division, home to the Wall Street Journal in the US and the Sun newspaper in the UK, into a separate public company.
News Corp fell as much as 4.2 per cent to US$22.72 in extended trading after the report.
The shares had surged 33 per cent this year, bolstered by the plan to break up the company.
Annual publishing profit fell 31 per cent to US$597 million, partly because of shrinking advertising revenue at the Australian newspapers as well as the closure of the News of the World newspaper, the company said.
Its plans to reignite publishing growth include the new Sun on Sunday, a weekly UK tabloid that filled the void left by News of the World. The company also raised the cover price of the daily Sun newspaper.
News Corp's cable network business performed well, said Brett Harriss, an analyst with Gabelli & Co in New York. Operating profit at the company's cable business rose 26 per cent to US$792 million, driven by increases in advertising and fees from pay-TV operators.
"Cable is the most significant segment for the company," he said.
The company reported writedowns of US$2.8 billion in the fourth quarter, "principally related to the company's publishing businesses, most significantly the Australian operations."
The spinoff of the publishing business should take about a year to complete, the company said in June. The entertainment company will be led by Murdoch but the board has yet to designate a chief executive officer for the publishing side. The annual cost of the phone hacking investigations to News was US$224 million.
News Corp chief operating officer Chase Carey said earnings at publishing businesses were expected to be flat in fiscal 2013.
He said that while improvements were expected in the UK, the ongoing restructuring of its Australia and US businesses "will adversely affect profits". Costs would be a major focus at the publishing businesses in 2013.
A new management team at News' Australian newspaper arm, News Limited, would move into a "significant restructuring" mode during the year.
- Bloomberg, AAP