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Murdoch's News Corp posts record loss

RUPERT Murdoch's News Corp posted its biggest ever quarterly net loss, after taking an US$8.4-billion writedown for the value of its Dow Jones acquisition, broadcasting licenses and other assets.

Excluding the charge, the results missed Wall Street forecasts as the recession exacerbated the fall in newspaper advertising sales and hit the company's other properties.

News Corp shares fell 6.3 percent to US$6.50 in after-hours trading and have shed about 65 percent of their value in the past 12 months.

"It is the worst global economic crisis since News Corp was formed 50 years ago," Murdoch, chairman and chief executive, said on a conference call with analysts.

He said it was impossible to be completely prepared for such a harsh economic downturn, but News Corp is cutting costs and staff where appropriate, as it expects advertising-supported businesses to weaken more.

Its Fox businesses have cut about 800 jobs, while its Wall Street Journal, which has seen ad revenue fall 20 percent, said it had eliminated 25 journalist's posts. The company has also slashed US$100 million in costs at Dow Jones, though it said there were no plans for layoffs at Dow Jones Newswires.

The latest media company to report gloomy results as advertisers slash their budgets in the weak economy, News Corp said its net loss was US$6.41 billion, or US$2.45 a share, for the fiscal second quarter to December 31. That compared with a profit of US$832 million, or 27 cents a share, a year earlier.

News Corp wrote down US$3.6 billion in goodwill, much of which is likely because of Dow Jones. Murdoch bought Dow Jones for US$5.6 billion in 2007, a 65-percent premium to its then market value. It wrote down US$4.6 billion in broadcast licenses from the US Federal Communications Commission and US$185 million in newspaper assets, which include the New York Post.

News Corp also owns the Fox television network, 20th Century Fox movie studio, the MySpace online social network, satellite TV network Sky Italia, and newspapers throughout the United States, Britain and Australia.

Excluding the impairment charge, News Corp's December quarter profit was 12 cents per share, lower than the average analyst forecast of 19 cents, according to Reuters Estimates.


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