Dark times

7 November 2008 By Una Galani Follow @ugalani

Few media groups have dared look into the future, but News Corp s forecast of a sharp profit decline next year confirms bleak times ahead. The speed and severity of the slowdown across all mediums continues to shock. Ad agency valuations suggest the economy is in real trouble.

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News Corp shares fell 25% in two days after the media giant slashed its 2009 earnings outlook, citing the global financial crisis, foreign currency weakness and slowing US economy weighing on the advertising market.

The publisher of Dow Jones Newswires, The Wall Street Journal and Fox forecast operating income for the year will fall by low to midteens percentage rate. In August, Newscorp predicted a gain of 46%. Citigroup estimates the change in guidance is equivalent $1bn swing.

Chief executive Rupert Murdoch said the local advertising market was grim.

News Corp shares are down 60% since the start of the year.

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