News Corp annual profits rise 8% to $2.74bn

Figures posted by the multimedia conglomerate yesterday (10 August) for the year to 30 June, are set against the backdrop of the phone hacking scandal that has engulfed its newspaper arm, News International.

However, the group’s 22% fall in net income in the fourth quarter was attributed to losses made on the sale of MySpace and slow box office and DVD sales for its 20th Century Fox film company.

The company reported $683m (£423m) net profit in the three months to 30 June, down from $875m last year. News Corp sold MySpace in June for $35m, having paid $580m for it in 2005. The group claim once revenues for the past five years are taken into account, it made a total loss of $254m on the music-led social networking site.

Despite the loss, the multimedia group still achieved a 12% lift in operating income to $4.98bn (£3.08bn), fuelled by the success of its US television and cable network programming.

News Corp chairman Rupert Murdoch said he was "pleased" with the operational momentum of the company, in both the final quarter and for the full year, but admitted to "challenges in recent weeks relating to our London tabloid, News of the World".

However, the media mogul stressed that to date there had been no financial losses accrued by the closure of the 168 year old News of the World.

Murdoch said: "It is important to note that there has been no material impact on our other operations. Our broad, diverse group of businesses across the globe is extremely strong today. The drivers of our businesses are intact, our position is strong and our future is promising.

"Our fundamental goals at News Corp are to produce sustained, meaningful value for shareholders, provide outstanding content and services to customers and consumers – and do it with integrity.

"These goals are interrelated and all three are critically important. And we will deliver on them."

Murdoch also stressed that News Corp was "acting decisively" in light of the News of the World hacking allegations and promised to "do whatever is necessary to prevent something like this from ever occurring again".

This article was first published on mediaweek.co.uk