News Corp. Swings to Loss on “Impairment”–and, by “Impairment,” I Mean “MySpace”
Looks like News Corp. was a little too optimistic when the company told investors in May that it expected a decline of around 30 percent in fiscal-year-adjusted operating income.
And, to think, News Corp. lowered that forecast twice last fall.
Anyway, the company lost $203 million, or eight cents a share, in its fiscal fourth quarter. Revenue fell 10.5 percent to $7.67 billion, dragged down by a decrease in ad revenue and $403 million in impairment charges and $228 million in restructuring costs, both largely attributable to, ahem, “red-hot social networking site” MySpace.
For the quarter, News Corp. swung from $1.1 billion in net income a year ago to a net loss of $203 million. Gruesome. Excluding items, however, it earned 19 cents a share, which beat consensus estimates by a penny. So there’s that.
“I think the worst may be behind us,” News Corp. Chief Rupert Murdoch said during a conference call with analysts. “But there are no clear signs yet of a fast economic recovery.”
Which is pretty much what he said last quarter as well. “I am not an economist…but it is increasingly clear that the worst is over,” Murdoch said back in May. “As you know, I have been uncharacteristically pessimistic in recent calls, though I would argue that it was a well-founded concern. But there are emerging signs in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier.”