Aug. 8 - A $3 billion charge overshadowed otherwise solid earnings at News Corp as the company continues to deal with the fallout from its hacking scandal. Bobbi Rebell reports.
The British hacking scandal continues to hack away at News Corp's image. Adding to its troubles- the media conglomerate has reported a one and a half billion dollar quarterly loss- mainly because of a massive $2.85 billion charge. Without the charge- the earnings were on target at 32 cents a share. That overshadowed growth in its cable networks which include Fox News Channel. The company says that business will see double digit percentage growth in 2013. S&P Capital IQ's Tuna Amobi: SOUNDBITE: TUNA AMOBI, MEDIA AND ENTERTAINMENT EQUITY ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "As long as the cable networks keep up this pace it's going to keep doing a lot of the heavy lifting. We were a little disappointed though in the rest of the guidance. The film division expected to be flat essentially despite the Ice Age 4 which kicked off the year in very strong fashion. They talk about advertising being relatively flat on the television side. We know that American Idol is getting some ratings challenges so I think they are tempering some expectations on the network side." News Corp stock has gained more than 30 percent so far this year- investors enthusiastic about the planned spin-off of its scandal-plagued publishing division. That business continues to be in restructuring mode- with growth expected to be flat this fiscal year. Mediatech Capital's Porter Bibb SOUNDBITE: PORTER BIBB, MANAGING PARTNER, MEDIATECH CAPITAL (ENGLISH) SAYING: "These are not growth businesses but Murdoch is taking very serious steps to try to transition to the digital sector in all of his papers and there will be a future for them. They are not going to vaporize. The bigger issue is the ethical and governance matters that have impacted the management. He is losing serious senior management in the UK and maybe senior management here." Still no word on possible management changes, and the Murdochs remain in control, as the phone hacking scandal continues to play out. Bobbi Rebell, Reuters.