Murdoch: 'Less robust growth' for News Corp.
EmptyRupert Murdoch's News Corp. expects "less robust growth" in its just-started fiscal year amid a tough U.S. economy that is affecting its local advertising businesses.
"Although we clearly face more challenging macroeconomic conditions in fiscal '09, we're well-positioned to deliver continued if somewhat less robust growth," chairman and CEO Murdoch said Tuesday after the market close. Speaking on a conference call from Beijing, he pointed to his conglomerate's increased global and business diversification as factors that will alleviate the economic pain.
CFO David Devoe predicted a revenue decline of about 5% in the broadcast TV unit this fiscal year but low- to mid-single-digit percentage revenue gains for most other businesses. Operating income will rise 4%-6%, he said. That compares with average gains in the high teens recently.
The comments came after News Corp. reported its sixth consecutive fiscal year of record profits and its seventh consecutive year of record operating profit in its film unit along with records in its TV, cable programming and satellite TV businesses.
Beyond the economy, the company's new fiscal year also is challenged by the release of tentpole films its very end, Fox not covering the Super Bowl and the lack of cost savings from the past fiscal year's writers strike.
Murdoch on Tuesday touted the outlook for key assets, including the much-maligned Dow Jones. And he said some of Cablevision's Rainbow Media cable networks "could be interesting at the right price," though he suggested that the Dolan family that controls the firm is asking for too much. Cablevision said Tuesday that it is looking at a possible sale or spinoff of units.
News Corp. posted a fiscal fourth-quarter profit increase of 27% to $1.1 billion. The gain was driven by the sale of its interests in Fox Sports Bay Area and Gemstar-TV Guide International along with double-digit percentage profit increases in most units. Revenue rose 17% to $8.6 billion.
For the full fiscal year, profit rose 68% to $5.4 billion, with $1.7 billion of the $2 billion improvement coming from a gain from various sales. Revenue rose 15%.
In the latest quarter, News Corp.'s TV unit saw its operating income fall 28% because of lower ad revenue at the local stations and lower ratings at the network. Film operating income more than doubled to $220 million thanks to the success of "Alvin and the Chipmunks," "Juno" and "AVP: Requiem" on DVD.
Fox Interactive Media grew its revenue 57% in the latest fiscal year and increased its operating profit fivefold, with News Corp. president and COO Peter Chernin predicting 30% revenue growth for the current year.
Asked whether News was in talks with Yahoo, Microsoft or AOL about a combination with FIM, Murdoch said, "We have moved on from those conversations."
Paul J. Gough contributed to this report.