Gemstar Sinks 3Q for News Corp.


News Corp. took a $4.23 billion fiscal-third-quarter write-down for its
Gemstar-TV Guide International Inc. investment -- resulting in a $4 billion loss
in the period -- and chairman Rupert Murdoch said he and his executives will
keep a close eye on the interactive-programming-guide company in the coming

News Corp., which owns a 42.6 percent stake in Gemstar, installed its own
executive -- former Fox Cable Networks Group president Jeff Shell -- as
co-president and chief operating officer at Gemstar last month.

In a conference call with analysts discussing News Corp.'s
fiscal-third-quarter results, Murdoch said he was disappointed in Gemstar's
stock performance but he still believes its technology has promise.

'In response, we are taking a much more active role in preserving the value
of this powerful asset,' Murdoch added. 'We've appointed one of our outstanding
executives, Jeff Shell, to be co-president and chief operating officer of
Gemstar. I and other senior members of News Corp. management team are spending a
great deal more time with [Gemstar chairman] Henry [Yuen] and Jeff to oversee
both operations and external financial reporting of their company. We believe
very strongly in the strategic importance of Gemstar.'

Later, on a conference call with reporters, Murdoch said News Corp. has
always had the right to appoint the COO of Gemstar.

Gemstar stock has been pounded after questions arose earlier this year about
its accounting methods. The company's stock is down 67 percent since the
beginning of the year.

Despite the write-down, News Corp. reported a strong quarter, with pro forma
revenue up 14 percent and operating income up 49 percent.

Its cable networks -- including Fox News Channel, FX, Speed Channel and Fox
Sports Networks -- tripled operating income in the period to $73 million.

News Corp. stock was up $1.60 per share, or 6 percent, to $27.98 in afternoon
trading Tuesday.