News Corp. Reports Lower Profit for 3rd Quarter

News Corp., the media company led by Rupert Murdoch, said fiscal third-quarter profit declined 34% as advertising fell at its U.S. TV stations and the movie “Monkeybone” lost money.

News Corp. said profit before extraordinary items fell to $127 million, or 12 cents an American depositary receipt, in the period ended March 31, down from $193 million, or 18 cents, a year ago. Revenue rose about 1% to $3.27 billion. One ADR represents four ordinary shares.

Advertising fell at News Corp.’s U.S. TV stations as the economy cooled, in spite of higher ratings at Fox, the No. 2-ranked TV network among adults under age 50.

News Corp. said the quarter’s ad decline wasn’t as steep as initially expected.

“I think we weathered [the ad weakness] well,” President Peter Chernin said on a conference call with analysts.

Per-share profit matched the average estimate of five analysts polled by First Call/Thomson Financial.

News Corp.’s filmed-entertainment unit, which includes the 20th Century Fox movie studio, had profit of $46 million, down from $95 million a year ago. The comedy “Monkeybone” hurt results. The movie, starring Brendan Fraser, cost an estimated $70 million to produce and market and had taken in just $5 million as of April 2.

During the conference call, Chernin also reversed the company’s position that it would consider investing in Viacom Inc.’s UPN television network. “I’m not sure I see us being an investor there,” Chernin said.

He said he sees no apparent regulatory issues with his company’s proposal to merge its satellite television unit Sky Global Networks with Hughes Electronics Corp.’s U.S. satellite service DirecTV.

Chernin asserted that the same could not be said for an alliance between DirecTV and EchoStar Communications Corp. EchoStar’s Chief Executive Charlie Ergen said last week that a merger between DirecTV and EchoStar’s Dish Network, which would combine the nation’s two satellite-television providers, would represent the greatest value to shareholders.

Last week, Hughes parent, General Motors Corp., approved formal talks with News Corp.

“We’re delighted and encouraged by the progress made in our negotiations,” Chernin told analysts in a separate conference call. “We are extremely optimistic and we have every reason to hope we’re going to get something done pretty soon.”

Separately, losses widened at one of News Corp.’s crown jewels--British Sky Broadcasting Group. Europe’s second-largest pay-television provider said fiscal third-quarter losses widened as it spent more on films, sports and interactive services such as betting to lure viewers.

The loss was 106.7 million pounds, or $152 million, a share, in the quarter ended March 31, compared with 22.4 million pounds in the year-earlier period, BSkyB said.

News Corp., which owns 38% of BSkyB, is trying to build a worldwide satellite broadcasting system to sell more services and cut costs.