Rupert Murdoch\’s News Corp says the “worst is over” after the media giant was hit by a sharp decline in demand for advertising in its third quarter, due to the global economic slowdown.
“It is increasingly clear that the worst is over,” chairman and chief executive Mr Murdoch said during a conference call on Thursday.
“There are emerging signs in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier.”
Mr Murdoch, who recently made bleak public comments about the state of the world economy, was optimistic that the situation was beginning to improve.
“We are beginning to see a number of bright spots that give us encouragement,” he said, following the release of the group\’s results for the three months ended March 31 of its fiscal 2009 year.
Mr Murdoch said customers were starting to return to the advertising market and were spending, although not at previous levels.
“At the very least, we\’ve hit a floor, and we seem to be getting a bounce.”
The US-based company, which includes Fox movie studio, MySpace, The Wall Street Journal, and newspapers in Australia, among other assets, maintained its guidance for the current financial year.
The company expects operating profit in the full year to be 30 per cent below the previous year\’s $US5.13 billion ($A6.92 billion) result.
Mr Murdoch\’s upbeat comments came after News Corp reported a 47.5 per cent drop in operating profit to $US755 million ($A1.02 billion) for the third quarter.
News Corp\’s net profit for the quarter, however, of $US2.73 billion ($A3.66 billion) was in line with the previous corresponding period result of $US2.69 billion ($A3.6 billion), after it received a boost of $US2.4 billion ($A3.24 billion) from the partial sale of its stake in digital technology company NDS Group and a one-off tax benefit.
The previous result had been lifted by a $US1.7 billion ($A2.29 billion) one-off gain from a stock exchange with Liberty Media Group.
Mr Murdoch said the company is focused on cutting costs and restructuring its businesses as far as possible.
“To that end we have reduced staff levels by 3,000 people – affecting very few journalists or creative personnel,” he said.
He said the company\’s third quarter results clearly reflected the effects of a “tough economy” on the group\’s businesses.
Operating profits at the company\’s television business plunged 99 per cent to $US4 million ($A5.4 million), while operating profit at its newspaper business dropped by 97 per cent to $US7 million ($A9.44 million) in the third quarter.
Mr Murdoch said the traditional newspaper model “must change” and that the company was looking at ways to charge readers for accessing the websites of its newspapers.
News Corp posted positive results for its filmed entertainment and cable businesses.
Filmed entertainment grew operating income by eight per cent to $US282 million ($A380.49 million) and the cable networks grew operating income by 30 per cent to $US429 million ($A578.83 million).