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News Corp's earnings held back by US television

News Corp, Rupert Murdoch's global media company, yesterday announced lower-than-expected earnings for the three months to 31 December of A$446m (pounds 203m) due to a poor performance from its US television operations.

Operating profits before one-time items rose 17.7 per cent, but were below the average forecast by Australian analysts of A$469m. The lowest forecast was A$449m, while the highest was A$491m. The company's shares fell as much as 16 cents to 670c before finishing at 676c.

"It's failed to deliver at the better end of expectations," said Lachlan Drummond, media analyst at Credit Suisse First Boston. "Television was worse than I expected."

Sales rose 7.4 per cent to A$3.9bn for the second quarter. The pre-tax result, after a one-time loss of A$39m, fell to A$407m. The one-time loss was related to debt payments and costs incurred in the sale of its educational book division, Harper Collins.

The second-quarter result propelled the company's first- half earnings to A$731m before one-time items, up 10.3 per cent. Sales for the first half were up 4.2 per cent to A$7.1bn.

"The filmed entertainment, magazine and inserts and UK newspaper operations all made solid gains in operating income," the company said.

"US television and book publishing, however, were off against last year."

Analysts remained bullish that the media company would meet its full- year forecast of a 20 per cent rise in earnings in fiscal 1996-97.

The company said the results were led by the film division, which posted a 154 per cent gain in operating profits in the first half, mainly on the success of Independence Day.

Filmed entertainment revenue for the six months to 31 December was A$2.15bn, up from A$1.75bn in the same period last year.

News Corp's UK newspaper operations posted a rise of 18 per cent in earnings in the first half, driven by growth in advertising and circulation revenues.