Deep cuts at MySpace triggered a $275m charge to News Corp's quarterly earnings, the US media group said as it disclosed that rivals and financial groups from the US and elsewhere had shown interest in the social networking site.
Results from MySpace were "below expectations", it said as Chase Carey, chief operating officer, confirmed the site "may be better developed under a new ownership structure". Analysts have questioned bidders' appetite, and Mr Carey gave no indication of when MySpace might be sold, or at what price
The charge on News Corp's digital media group came after MySpace cut half its staff and marred otherwise strong results in which rising cable and broadcast television profits more than offset declines in film and digital media.
Net income for the fiscal second quarter more than doubled to $642m, or 24 cents per share, from $254m, or 10 cents, a year earlier, when results included a $500m litigation settlement. Excluding one-offs, adjusted earnings per share rose 16 per cent from 25 cents to 29 cents.
News Corp reiterated guidance for "low double-digit" full-year operating income growth, echoing confidence voiced by Time Warner, whose shares rose 8 per cent after its quarterly earnings on Wednesday.
Rupert Murdoch, chairman and chief executive, missed a call with analysts and reporters as he was providing briefings on The Daily, the app News Corp launched on Apple's iPad earlier in the day. The quarterly results included The Daily's $30m start-up costs.
Executives made no comment on the News of the World phone hacking story that has engulfed News Corp's UK newspaper arm and complicated its planned bid for full control of British Sky Broadcasting.
News Corp continued to believe it had made "a full and fair offer" for BSkyB. News Corp's cable division, which includes Fox News and generates almost 60 per cent of operating profit, improved operating income by 22 per cent to $735m, driven by rising fees from US cable and satellite carriers and a 37 per cent advance in its international channels, notably in India and Latin America.
The US broadcast business, where operating income jumped from $29m to $151m, was on track to generate at least $1bn in annual operating income "within a couple of years", Mr Carey said.
An advertising rebound drove a 20 per cent rise in revenue at the company's local television stations and the core Fox broadcast network benefited from strong advertising around National Football League games.
The filmed entertainment division, which made Avatar and Black Swan, suffered by comparison with last year, which had seen strong home entertainment sales of Ice Age: Dawn of the Dinosaurs. The unit's operating income dropped from $324m to $189m year-on-year.
News Corp said quarterly operating losses at its "other" division, including MySpace, rose from $125m-$156m year-on-year.
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