News Corp. Records Net Loss

News Corp. swung to a quarterly net loss Thursday because of an accounting charge, but beat analyst forecasts as a result of the continued strength of its movie studio and cable channels.

The New York media giant, controlled by Rupert Murdoch, reported a deficit for its fiscal first quarter of $433 million, or 13 cents a share, compared with a profit of $625 million, or 21 cents, a year earlier.

Revenue rose 10% to $5.7 billion in the quarter that ended Sept. 30, beating the $5.62-billion average estimate of 14 analysts surveyed by Thomson Financial.

The company took a $1-billion noncash charge to write down the value of its television station licenses to comply with changes in accounting rules. Other television station owners have taken similar charges.

Excluding the charge, News Corp. earned 18 cents a share, which beat analysts’ forecasts of 16 cents a share.

In a conference call with analysts Thursday, Murdoch expressed frustration with the company’s sagging stock price.

Analysts said uncertainty over Murdoch’s Internet spending, his stalemate with shareholder John Malone, the sustainability of the DVD market and the shaky television advertising market were weighing down the stock -- perhaps unfairly.

“This is our favorite stock right now,” said Richard Greenfield of Fulcrum Global Partners.

He said no media company had the growth potential or had invested as prudently for the future as News Corp. “They are getting zero credit for their Internet investments.”

News Corp.’s Class A shares are down about 20% this year. They rose 8 cents in after-hours trading Thursday, to $14.75. Results were released after the close of regular trading.

Although the cost of the Internet strategy forced the company to reduce its operating income forecast for fiscal 2006 to 12% from the mid-teens, Greenfield said recent acquisitions would allow News Corp. to capitalize on the mass traffic flowing to the Web.

Murdoch reiterated Thursday that the $2 billion earmarked for Internet ventures “still feels about right, but one can never know.”

News Corp. has spent about $1.4 billion recently on three online acquisitions, including the owner of MySpace.com, a social networking site.

Murdoch said it was unlikely that News Corp. would pursue a deal with Time Warner Inc.’s America Online, which is considering a partnership with Google Inc. or Microsoft Corp.

He said Malone was waiting for certain tax changes before reducing his 18% stake in News Corp.

News Corp. President Peter Chernin said the company remained optimistic about home video sales because of its leading position in the fastest-growing segment: television DVDs.

Although revenue declined at its Fox TV stations during the quarter because of a weak advertising market, Chernin said News Corp. wasn’t hurt as much as some of its rivals, in part because of a 30% increase in ratings at the Fox network and an expansion of news programming at several of the Fox stations.

During the quarter, home video sales of “Robots” and box-office ticket sales for “The Fantastic Four” increased profit at the company’s 20th Century Fox studio by 26%. The cable-channel business’ profit rose 18% to $197 million.