News Corp posts $2.85 bn loss on restructuring charge

Rupert Murdoch's News Corp posted a quarterly loss on Wednesday after taking $2.85 billion of non-cash restructuring and impairment charges that overshadowed growth at its cable networks, the company's only major bright spot.

All of its other main divisions performed less well than a year ago.

After adjusting for the charges related to a writedown of its publishing operating business - mainly in Australia - News Corp earned 32 cents, down from 35 cents a year ago.

The company's adjusted profit met analysts' expectations, but its shares were off 3 percent in after-market trading.

News Corp posted a fiscal fourth-quarter net loss of $1.55 billion, or 64 cents per share, compared with a profit of $683 million, or 26 cents per share, a year ago.

Revenue fell 6.7 percent to $8.4 billion during the quarter.

Chief Financial Officer Dave Devoe said the company expects high single to low double-digit percentage growth in operating income in the current fiscal year, ending June 30, 2013.

The company forecast double-digit growth in fiscal 2013 from its cable networks offsetting weaker performance at such units as Sky Italia.

In an interview Chief Operating Officer Chase Carey said he expects his company's local and national TV networks to outperform a relatively flat market by low to high double digits upfront. "And I'd say our cable networks' (advertising revenues) are much stronger than that."

The company is set to make significant investments in its fledgling education unit, called Amplify. The unit, headed by former New York schools Chancellor Joel Klein, is budgeted to rack up around $180 million in operating expenses in the fiscal year, up from around $80 million in 2012.

"Some key numbers in the quarter and the outlook they gave were a small miss for us due to the struggles they have with Sky Italia in a troubled economy and the costs with the new education unit," said Evercore Partners analyst Alan Gould.

At its cable networks, operating profit rose 26 percent on a 16 percent increase in affiliate fee revenue from cable, phone and satellite TV distributors. Advertising revenue at its domestic cable channels rose 5 percent.

Operating income at the company's movie unit fell 43 percent to $120 million.

Fox Broadcasting saw operating income drop 8.5 percent.

News Corp owns Fox Broadcasting in the United States, the FX and Fox News cable networks, and such newspapers as The Wall Street Journal and The Sun in the UK. It is also parent of the Twentieth Century Fox studios.

The publishing business reported a 48 percent drop in operating income to $139 million due to lower advertising revenue at its UK and Australian newspapers as well as its integrated marketing business. It was also affected by the a litigation settlement charge at its Harper Collins book publisher.

The company said in June it would separate its publishing and entertainment assets by next year in move to satisfy shareholders who had been pressing News Corp to rid itself of its troubled newspapers business, especially after a phone hacking scandal at its British tabloids forced the company to drop its proposed acquisition of pay-TV group BSkyB.

It took a charge of some $224 million related to the hacking investigation in fiscal 2012.

News Corp shares have risen more than 14 percent since the plan for the split was revealed on June 26, touching their highest price for five years.

(Editing by Steve Orlofsky)