Rupert Murdoch has sharply cut forecasts for News Corp, predicting lower ad revenue will see it suffer double-digit declines in operating income for this fiscal year, rather than the 4-6 per cent growth previously forecast.
News Corp said it expects a low to mid-teens percentage drop in operating profit from the $5.13 billion it recorded last year.
Net income fell to $515million from $732million a year earlier, driven in large part by a writedown of News Corp's stake in Premiere. The group had built a 25.1 per cent stake in the German pay-television group before it delivered a profit warning in October.
Sky Italia raised operating income from $48 million to $165 million, while gains in affiliate fees and advertising revenues lifted operating income from the cable network group that includes Fox News by 31 per cent. Revenue growth at Fox Interactive Media, which includes the MySpace social networking site, slowed to 17 per cent, against a previous forecast of 30 per cent. News Corp's local television stations saw a steep fall in profits, as higher political advertising on Fox was not enough to offset a weaker advertising market.