News Corp losses exceed Wall Street predictions
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Rupert Murdoch on Thursday expressed frustration at the stock market?s failure to recognise News Corporation?s strong financial growth as the media company reported quarterly results that exceeded Wall Street?s expectations.
Mr Murdoch, chairman and chief executive of News Corp, acknowledged that the unresolved issue of a 19 per cent voting stake acquired by John Malone?s Liberty Media in News Corp was ?clearly a distraction?.
However, he said News Corp was delivering stronger financial growth than its media peers and he reiterated the company?s internet strategy, which has resulted in a number of acquisitions and could be followed by more.
Investors are concerned that traditional media companies will lose both advertising revenues and audiences as both shift online.
The company on Thursday reported a quarterly net loss due to a $1bn non-cash charge resulting from accounting changes, but revenue rose 10 per cent on the back of significant advertising gains from Fox News and the group?s movie
Revenue rose 10 per cent to $5.7bn. Excluding a $1bn non-cash charge on the value of its television station licenses, News Corp?s profit of 18 cents per share beat average analyst forecasts for profits of 16 cents per share.
News Corp shares are down about 23 per cent since the beginning of the year, performing worse than the shares of other media companies, which are also underperforming the broader market. So far this year, the S&P 500 index is down about 2 per cent.
Echoing comments from Mr Malone on Thursday, Mr Murdoch did not anticipate a resolution soon, not least because of Mr Malone?s desire to avoid paying any tax on a sale or transfer of his News Corp stake.
Mr Malone?s unexpected increase in his voting stake in News Corp last year resulted in the introduction of ?poison pill? measures to prevent a further increase in his stake. The extension by the News Corp board of these measures without asking shareholders to vote has prompted a number of institutions to sue directors for breach of promise.
On Thursday, a Delaware court heard News Corp?s arguments to dismiss the lawsuit, and the judge said he would decide soon. A decision is not expected until next week at the earliest.
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