News Corp Reports Q2 Loss, Plans Rigorous Cost-Cutting
By Anna Johnson on February 9th, 2009Reporting a loss in its second quarter earnings report, News Corporation’s CEO, Rupert Murdoch said the downturn is “more severe and likely longer lasting than previously thought” and added that News Corp is “implementing rigorous cost-cutting across all operations and reducing head count where appropriate.”
The Silicon Alley Insider translates this to mean impending layoffs. Apparently 14 employees have already been let go from the News Corp owned Wall Street Journal.
The Q2 loss is largely due to a large write down. Without the write down, the company would have reported $818 million in operating income.
Some areas of News Corp’s business performed reasonably well, with cable operations growing from $337 million in Q2 2007, to $428 million in Q2 2008, and magazines and inserts increasing from $85 million to $86 million year-over-year.
Other areas performed poorly. News Corp’s movie business generated operating income of just $112 million in the second quarter ended December 31, 2008. This is drastically below the $403 million it made in the same period the year before.
News Corp doesn’t isolate income from Fox Interactive, of which MySpace forms part, however the operating income of its “other” category, which includes Fox Interactive, was in the red.
The group lost $38 million, apparently due to “increased costs associated with the growth in unique users, international expansion, the launch of MySpace music and new features, as well as lower subscription revenue at IGN.”
