Rupert Murdoch's News Corp reported an 11 percent drop in quarterly revenue on falling advertising sales at its local TV stations and newspapers, but said it expects modest improvement in coming months.
Murdoch said on Wednesday the worst may be over for the global media conglomerate, which has struggled along with its peers as companies cut back their advertising budgets due to the recession.
News Corp posted a net loss of $203 million, or 8 cents a share, for its fiscal fourth quarter ended June 30, primarily due to impairment charges for Fox Interactive Media, the unit that houses the MySpace social network. Net income a year ago was $1.13 billion, or 43 cents a share.
They still have strong content assets that are carrying them, primarily filmed entertainment and the cable networks, said Miller Tabak analyst David Joyce. There's still a lot of long-term value in the infrastructure they have in place.
The results also echo the general notion that the other media conglomerates have reiterated over the past week that the worst is behind us, he said.
Revenue fell 10.7 percent to $7.67 billion, in line with analysts' expectations, according to Reuters Estimates. Shares of News Corp were flat in extended trading.
TV revenue, including at its Fox Television Stations unit, fell as local TV station ad revenue fell 27 percent.
The past year has been the most difficult in recent history, and our 2009 financial performance clearly reflects the weak economic environment that we confronted throughout the year, Murdoch said in a statement.
Revenue rose at News Corp's filmed entertainment division, helped by films such as Slumdog Millionaire and Marley & Me. Cable programing revenue also rose.
Excluding charges, the company said its adjusted operating income was $948 million, or 19 cents a share, compared to $1.4 billion a year ago.
News Corp shares have more than doubled since hitting a low of $4.95 in March, reflecting a media stock rally fueled by investor hopes that the ad market might be improving after months of decline. Some U.S. newspaper publishers and local TV broadcasters such as Gannett Co Inc have said in recent weeks that ad declines are beginning to ease.
While big media companies from Time Warner Inc to Viacom and CBS Corp have suffered from the ad cutbacks, News Corp has particularly worried investors because of its concentration on so-called old media.
Among other properties, it owns The Wall Street Journal and New York Post newspapers, along with local Fox TV stations and many other newspapers around the world.
News Corp's other segment, which houses MySpace and Fox Interactive Media, reported an operating loss of $136 million because of lower ad revenue at MySpace.
News Corp's prize new media asset, the MySpace online social network, has faltered in recent months as competition rises from its big rival Facebook.
(Reporting by Robert MacMillan; Editing Bernard Orr)