News Corporation posted lower fourth-quarter results as the advertising slump hit its Fox television unit – but forecast operating profit to rise 15 percent to 25 percent in fiscal 2002.
Rupert Murdoch, chief executive of News Corp., also defended his bid to buy the satellite television unit of General Motors’ Hughes Electronics. In a conference call with reporters, Murdoch said: “The assumptions that our deal offers no premium and few synergies are dead wrong. Our deal offers a healthy premium and synergies that no other company can match.”
EchoStar bid about $30 billion in stock and debt earlier this month for Hughes’ Direct TV.
News Corp., which also owns The Post, reported consolidated revenues of $13.8 billion and operating income of $1.669 billion for the fiscal year ended June 31, 2001, versus $14.2 billion and $1.729 billion in the year-ago period.
News Corp. reported a profit of $145 million, or 12 cents per American Depository Receipt (ADR), compared with $184 million, or 18 cents, a year ago. The results beat Wall Street forecasts of 11 cents.
Successes included video and DVD sales of movies, especially Tom Hanks’ “Cast Away.” The Fox News Channel was also significant: Fox Broadcasting had a strong year.
Chief Operating Officer Peter Chernin said growth in 2002 would come from its film, cable television and U.S. broadcast businesses. The $550 million Chris-Craft acquisition was recently completed, giving an expected boost in ad revenue by 2002.
Recent movies such as “Planet of the Apes” and “Moulin Rouge” are also expected to bring in healthy returns, and the film group has a new installment of the “Star Wars” series and a new Steven Spielberg movie lined up.
Chernin said the company’s newspaper operations, which include The New York Post, The Sun and The London Times, were hit by the soft ad market, with operating income down 25 percent to $121 million.
The company said operating profits in the current fiscal year should rise to $2 billion to $2.1 billion, an increase from $1.67 billion in 2001.
Shares of News Corp. ADRs closed at $35.68, down 12 cents. Fox shares rose 6.5 percent, or $1.54, to $25.29.