News Corp. reports loss, cuts profit forecast

New York, February 6: News Corp., the gigantic media company which owns, The Wall Street Journal and the Fox broadcast network announced on Thursday, that it has registered its first loss in the last three years.

The company, controlled by Rupert Murdoch lost as much as $6.4 due to enormous write-downs and drooping advertising revenue.

New York-based News Corp also warned that its operating profits for the fiscal year, ending June might plummet 30 percent from the year ago profits. In Nov. it had forecast a "low to mid-teens" percentage drop for the year.

David Bank, a New York-based analyst at RBC Capital Markets said that given the economic recession, the results were expected, "It was bad, but it wasn't out of left field," Bank said. "It was probably more of a confirmation of what we expected rather than a new set of information."

Chief Executive Officer Murdoch admitted that it was the nastiest economic crisis that News Corp. had faced since inception. He said, “The downturn is more severe and likely longer lasting than previously thought.”

He added that rigorous cost-cutting and expense reduction measures have been put into practice by the company. He said, "We are doing everything we possibly can to position ourselves to emerge stronger when the economy returns to some semblance of normalcy.”

As the company finds itself in a quagmire, it has slashed 800 positions in Fox properties, which includes the 20th Century Fox movie studio. The expected saving out of the move is likely to the tune of $400 million p.a. The company has also cut close to 24 newsroom positions at The Wall Street Journal.

News Corp. has entered into parleys with its distributors to review the present contracts. The media group also intends to merge its Australian and New York backroom operations to save costs. All of this is likely to cost $10 million less than what it used to cost News Corp.