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News Corp. reports 22 percent drop in net income in 2nd quarter

Thursday, August 11, 2011

LOS ANGELES -- News Corp., the media conglomerate under fire for phone hacking in Britain, said Wednesday that its net income for the last quarter fell 22 percent mainly because of the sale of social networking site MySpace. It also acknowledged for the first time that it is facing investigations into whether alleged phone hacking and police bribery occurred at its subsidiaries outside of the U.K.

"The company is fully cooperating with these investigations," the company said in a statement.

Net income at the TV and newspaper giant controlled by Rupert Murdoch fell to $683 million, or 26 cents per share in the three months through June. A year ago, the company earned $875 million, or 33 cents per share.

Excluding the $254 million loss on the MySpace sale, adjusted earnings came to 36 cents per share, beating the 30 cents expected by analysts polled by FactSet.

Revenue grew 11 percent to $8.96 billion from $8.11 billion. That also beat expectations for revenue of $8.51 billion.

Addressing the hacking scandal, Murdoch said in a statement that the company is "acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again."

Murdoch vowed to investors on a conference call that he will remain as chief executive of the company and said he had the backing of the company's board. But he said that he and chief operating officer Chase Carey act "as a team" and are jointly responsible for the company's performance.

News Corp.'s nonvoting Class A shares rose 4 cents to $13.75 in after-hours trading, after dropping 84 cents, or 5.8 percent to close at $13.71 in the regular session. Since the phone hacking scandal erupted in early July, shares have fallen 24 percent and the company has lost more than $11 billion in market value.


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