Message-ID: <7360183.1075857130389.JavaMail.evans@thyme> Date: Thu, 9 Nov 2000 01:27:00 -0800 (PST) From: fool@motleyfool.com To: benjamin.rogers@enron.com Subject: Breakfast With The Fool: News Corp. Reports Drop in Earnings Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: The Motley Fool X-To: benjamin.rogers@enron.com X-cc: X-bcc: X-Folder: \Benjamin_Rogers_Dec2000_1\Notes Folders\All documents X-Origin: Rogers-B X-FileName: brogers.nsf _________________________________________________________________ B R E A K F A S T W I T H T H E F O O L Thursday, November 9, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=188026 _________________________________________________________________ Sponsored By: Scottrade Scottrade: $7 Trades, 120+ offices, personal brokers, FREE REAL TIME Quotes & charts. Check out our financial services: CDs, Bonds, Mutual Funds, no setup fees on IRAs. Apply now! http://www.lnksrv.com/m.asp?i=188027 "It has been said that democracy is the worst form of government except all the others that have been tried." -- Winston Churchill NEWS CORP. REPORTS DROP IN EARNINGS The company's profits decline due to a ratings downturn at the Fox TV network. By Chris Rugaber Multinational media conglomerate News Corp. (NYSE: NWS) reported a decline in profits for its fiscal first quarter last night, thanks to an accounting change and reduced ad revenues from its Fox TV network. After-tax operating profit fell to $149 million, or $0.14 per American depositary receipt (ADR), from $165 million, or $0.16 per ADR, in the year-earlier period. (Like most other non-U.S. based companies, News Corp. shares trade as ADRs.) The reduced profits did meet average analysts' estimates. Revenues rose 2.6% to $3.24 billion. Thanks to a change in accounting for the company's film business, News Corp. took a non-cash charge of $417 million, resulting in a net loss for the quarter of $268 million, or $0.27 per ADR. All Hollywood studios have been adjusting their finances to reflect new accounting standards, which affect marketing and development costs, among other things. The decline in News Corp.'s operating profits was primarily a result of lower ratings and advertising revenue for the Fox TV network, which suffered from the success of CBS's Survivor and the Olympics on NBC. The No. 4 U.S. network posted an operating loss of $31 million, compared to $20 million in operating earnings a year earlier. The network also reported higher production and marketing costs, which may explain all those promotions for the new series Dark Angel. As a result, News Corp.'s separately traded U.S. media subsidiary, the Fox Entertainment Group (NYSE: FOX), which owns the television network and the 20th Century Fox film studio, reported a 16% drop in fiscal first-quarter operating profit. While the film studio's cash flow almost doubled to $119 million, from $62 million a year ago -- thanks largely to the success of the movie X-Men -- this did not offset the declines in television ad revenues. Overall, profits declined in three of the six operating divisions of the company -- television, magazines, and newspapers -- while earnings improved for the movie studio, cable, and publishing businesses. CEO Rupert Murdoch noted in a conference call that the company planned to proceed with an IPO of its satellite unit, Sky Global Networks, in the first calendar quarter of next year. _________________________________________________________________ NEWS TO GO The tougher climate for online businesses claimed more casualties yesterday, as B2B holding company Internet Capital Group (Nasdaq: ICGE) announced that it would cut 50 jobs, or 35% of its workforce, and take a charge of $25 million to $30 million to pay for the cuts. The company's shares fell $3.50 in after-hours trading to $12.75, on top of a 90% drop so far this year. Investors in the company may be relieved to know that, according to CEO Walter Buckley, "We're very much moving from a land grab area to an execution area." The drama continues at speech-recognition company Lernout & Hauspie (Nasdaq: LHSP), makers of Dragon and Dictaphone software, as the company's co-founders stepped down from their executive positions today. The company will also delay its 10-Q filing as it restates results for 1998, 1999, and the first half of this year due to errors the company found in an internal audit. But wait, there's more bad news: The company also said that third-quarter revenue would fall short of previous forecasts by about 24%. ABC's hit show Who Wants to Be a Millionaire? continues to reward parent company Disney (NYSE: DIS), which today reported a fiscal fourth-quarter profit of $167 million, or $0.11 per share, thanks in part to increased ad sales at ABC. Excluding the company's Internet properties, Disney earned $0.20 per share, $0.02 ahead of consensus estimates. The company lost $126 million, or $0.02 per share, in last year's fiscal fourth quarter. Revenues rose 5.8% to $6.12 billion. For the full year, the company reported revenue growth of 9% to $25 billion, and net income of $1.9 billion, or $1.92 per share. Warren Buffett's holding company Berkshire Hathaway (NYSE: BRK.A) announced last night that it will purchase paint maker Benjamin Moore for about $1 billion in cash. Berkshire will pay $37.82 per share for the company, a 51% premium to yesterday's closing price. New Jersey-based Benjamin Moore makes home exterior and interior paints, and is the second housing-related acquisition for Berkshire in recent months. The company purchased carpet-maker Shaw Industries in September. _________________________________________________________________ EDITORS' PICK Is the hype surrounding Web-hosting giant Exodus really too good to be true? 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Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-19742-2000-11-09_9-18-44-3352472_2_Plain_MessageAddress.msg-09:24:03(11-09 -2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com