A slump in advertising sales and discretionary spending is being blamed for a massive writedown in profits at News Corp. The economic downturn is more severe and likely longer lasting than Rupert Murdoch previously thought.
News Corp posted a first half net loss of $US5.9 billion ($A9.19 billion) for the first half, compared with a net profit of $US1.564 ($A2.43) billion a year ago.
- $US8.4 billion pretax writedown in of assets
- Operating earnings will fall about 30% in 2008/09
- Earnings on the Australian newspapers The Australian and The Daily Telegraph fell 18% in the second quarter from a year earlier
The AFR has suggested that losses may put pressure on the company to break itself up into smaller divisions, however this has been played down by News Corp, and Mr Murdoch has announced plans to cut costs and jobs to deal with the downturn.
In other media news, Standard & Poors downgraded its long-term credit rating of Fairfax Media from stable to negative.
Stocks for your watch list:
- News Corp: NWS (ASX and Nasdaq)
- The Australian Financial Review
- Reuters News Feed through Market Analyser