News Corp. Profit Falls 10% Amid Lower Audience Ratings at Fox TV

News Corp., the media company controlled by Rupert Murdoch, said Wednesday that its fiscal first-quarter profit fell 10% because of lower audience ratings at Fox Television Network.

Profit from operations fell to $149 million, or 14 cents per American depositary receipt, from $165 million, or 16 cents, a year earlier. Revenue rose 2.6% to $3.24 billion. The profit matched the average estimate of eight analysts polled by First Call/Thomson Financial.

Fox, the No. 4-rated U.S. TV network, was less attractive to advertisers amid competition from the broadcast of the Summer Olympics on General Electric Co.’s NBC network and hit shows such as “Survivor” on Viacom Inc.’s CBS. The weakness offset higher cash flow at the filmed entertainment unit, which benefited from such box-office successes as “X-Men.”

News Corp. President Peter Chernin said he expects “softening” in the U.S. advertising market in its fiscal second quarter, which ends Dec. 31. He hopes improved ratings at Fox will offset the expected industrywide slowing of ad sales, Chernin said during a conference call with reporters.

The Fox network posted a cash-flow loss of $31 million, contrasted with cash flow of $20 million a year ago. Cash flow--or earnings before interest, taxes, depreciation and amortization--is widely used by analysts and investors to measure the performance of indebted, acquisitive media companies because it excludes interest payments and noncash charges such as amortization.

Cash flow was reduced in part because of higher marketing expenses to promote new shows at the Fox network.

At Fox Entertainment Group Inc., Sydney-based News Corp.’s U.S. media arm that includes the Fox network and 20th Century Fox studio, profit from operations fell 16% to $36 million, or 5 cents a share. Revenue at Fox rose 1.5% to $1.83 billion.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* AnnTaylor Stores Corp. said its fiscal third-quarter profit rose 11% to $23.9 million, or 78 cents a share, from $21.4 million, or 65 cents, a year earlier. Earnings matched estimates. Sales rose 12% to $305.9 million from $272.3 million, the company said.

* ArvinMeritor Inc., the largest maker of heavy-truck axles, said it will cut about 1,500 jobs, or 4% of its work force, to reduce costs as North American heavy-truck and automobile production slows. ArvinMeritor announced the move along with a 56% decline in its fiscal fourth-quarter earnings. The company, which now has about 36,500 employees, said it expects a first-quarter charge for the cuts of $39 million, or 57 cents a share. It sees pretax savings from the move of about $25 million in its fiscal 2001 and $50 million the next year.

During the quarter ended Sept. 30, net income fell to $29 million, or 43 cents a share, from profit from operations of $66 million, or 86 cents, a year earlier. Sales fell 11% to $1.68 billion.

* Cable-TV operator Cablevision Systems Corp. said its third-quarter loss narrowed as it gained more customers for high-speed Internet service. Net loss narrowed to $40.1 million, or 23 cents a share, from $178.1 million, or $1.17, a year earlier. Sales rose 15% to $1.04 billion.

* Federated Department Stores Inc. said its fiscal third-quarter profit fell 58%, hurt by an increase in late credit card payments and other problems at the company’s Fingerhut catalog business. Profit from operations at the owner of Bloomingdale’s, Macy’s and other chains fell to $51.6 million, or 26 cents a share, from net income of $123 million, or 56 cents, a year earlier. That beat expectations of 20 cents. Revenue rose 1.4% to $4.19 billion. Sales at stores open at least a year rose 1.9%.

* Imax Corp., whose profit warning last month prompted its stock to plunge 70%, reported a third-quarter loss and blamed it partly on tough financial conditions in the North American movie screening industry. Toronto-based Imax posted a net loss of $1.2 million, or 4 cents a share, on revenue of $53.6 million. That contrasts with earnings of $3.2 million, or 11 cents a share, on revenue of $42.5 million at year ago. Analysts had forecast a loss of 2 cents.

* Polo Ralph Lauren Corp. said its fiscal second-quarter profit fell 12% because of a planned delay in reporting results from its European business and the timing of shipments to department stores. Profit from operations fell to $48.8 million, or 50 cents a share, from net income of $55.3 million, or 56 cents, a year earlier. Sales at the maker of Ralph Lauren, Polo Sport and Chaps clothing rose 7.8% to $586.2 million.