News Corp posts $1.6bn loss as NOTW costs soar
By Pamela Mardle Friday, 10 August 2012
The multi-billion dollar costs of the investigation into the closure of the News of the World (NOTW) last July have restricted financial growth at News Corporation.
The global news and entertainment giant suffered a quarterly net loss of $1.6bn for Q4 compared to a net income of $683m in the same period last year.
Additionally, News Corp experienced a $2.9bn pre-tax loss for the quarter primarily related to its publishing division as well as a $167m decrease in operating income, lowering the figure to $1.2bn compared to $1.4bn reported in June 2011.
A quarterly $57m charge related to ongoing investigations of NOTW’s closure more than offset the $161m increase at News Corps Cable Network Programming, which includes Fox News Channel, up by more than a quarter on Q$ 2011.
Throughout the US financial year, NOTW investigations have amassed fees of $224m, adding to 2011’s $125m charge.
News Corp’s annual operating income increased by $5.4bn compared to 2011’s $4.9bn and revenues increased 1% to $33.7bn for 2012.
Operating income was up across nearly all divisions compared to 2011 bar publishing, which produced a year-end figure of $597m compared to 2011’s $864m.
News Corp cited advertising weakness across its international newspapers and the absence of NOTW as reasons for the publishing segment’s income decline.
News Corp chief executive Rupert Murdoch, who resigned as chairman of News International in July, said that he was proud of the growth led by the Cable Network Programming and Filmed Entertainment segments over the past financial year.
He added: "News Corp is in a strong operational, strategic and financial position, which should only be enhanced by the proposed separation of the media and entertainment and publishing businesses."
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