News Corp. Profit Gets Boost From Box Office

Rupert Murdoch’s News Corp. reported a net loss of $23 million in the latest quarter because of a large write-down from investments. Without one-time items, earnings rose on a turnaround in box office results.

News Corp. posted a charge of $281 million on losses related to restructuring its partnership with WebMD and investments in other Internet companies. Net earnings a year ago of $677 million were lifted by gains from the sale of shares in EchoStar, the satellite broadcaster.

Taking away the effects of one-time gains and losses, News Corp.’s operating profit rose to $270 million, or 26 cents a share, from $252 million, or 25 cents a share, a year ago.

That beat the 19 cents a share expected by analysts surveyed by First Call/Thomson Financial.

News Corp.’s shares were up $1.27 to close at $38.77 Wednesday on the New York Stock Exchange.

Of all News Corp.’s media holdings, only the movie studio showed a marked improvement in operating earnings, to $128 million from $31 million, which the company attributed to strong video and worldwide box office receipts from “X-Men” as well as earnings from its 20th Century Fox film library.

Operating earnings from television stations, the Fox network, and newspapers all suffered from a slower advertising environment. Fox in particular took a hit from poor results from broadcasts of post-season baseball games. Overall television earnings declined 21% to $175 million.

Earnings from newspapers slipped 9% to $135 million, led by a decline in the company’s Australian newspaper holdings.

News Corp.’s cable earnings jumped to $44 million from $24 million as Fox News Channel became profitable for the first time since being launched four years ago. The upstart channel has been gaining ground on CNN, and News Corp. says it beats CNN in ratings in the homes in which both are available.

At a Glance

Other entertainment sector earnings, excluding one-time gains or charges unless noted, include:

* British Sky Broadcasting Group’s fiscal second-quarter loss widened as Europe’s second-largest pay-television company spent more money on marketing and programs to draw new customers and convert existing ones to digital service.

The company’s seventh straight loss was $199.4 million in the quarter ended Dec. 31, compared with a loss of $53.1 million in the year-earlier period. The most recent loss includes a charge of $36.3 million to write off investments in Internet companies.

BSkyB aims to convert subscribers to SkyDigital so they’ll spend more on services such as shopping and banking through their TVs. Revenue from interactive services totaled $54 million in the fiscal first half, 89% of which came from the TV betting service launched in December.

The company “has to prove it can increase revenue from other services than standard TV,” said Mathew Horsman, an analyst with Investec Henderson Crosthwaite, with a “buy” rating on BSkyB.

BSkyB, 38% owned by News Corp. and 23% owned by France’s Vivendi Universal, had 5 million direct customers at the end of 2000, meeting a goal set last year. Of those, 92%, or 4.7 million, were digital customers.

The company’s shares fell $2.25 to $95 on the New York Stock Exchange. They’ve lost about a third of their value in the last 12 months.