Sydney, Aug 20: Rupert Murdoch's international media group News Corp announced lower full-year profits on Wednesday, with net earnings slashed by lower film profits and abnormal losses at the group's US publishing arm.

News Corp's net profit after abnormals for the year to June 30 fell to A$720 million ($543 million) from A$1.02 billion a year ago. Abnormal losses totalled A$575 million.

The Australian-born Murdoch had on several occasions promised to lift group profits for the year by 20 percent.

But attributable taxed profits before abnormal items -viewed by the financial markets as the best measure of success - rose by only 2.5 per cent to A$1.30 billion.

Geographically, Britain was the strongest of News' major markets, with pre-tax earnings rising to A$488 million from A$351 million. Earnings from the US operations dropped marginally from A$1.13 billion from A$1.15 billion and earnings in Australia and the Pacific region also fell.

News Corp also announced that it planned to buy back up to A$.3 billion worth of its preferred shares in the market because it had cash in excess of its immediate needs.

Australian media analysts cranked up their spreadsheets early on Wednesday afternoon to downgrade their 1997/98 profit forecasts for Rupert Murdoch's News Corp Ltd by about A$100 to $150 million to some A$1.5 billion ($1.11 billion) Analysts said results for the year to June 30, 1998 were well below expectations, largely because movie flops "Speed II" and "Volcano" generated $119 million in losses from News' Film unit in the final quarter.

"It's a shocker," said one Melbourne media analyst."I'm downgrading and I'm downgrading by a lot," he said.Analysts said they were likely to finalise new profit forecasts for 1997/98 at between A$1.45 billion and A$1.55 billion.

Only a month ago, analysts were expecting net profit before abnormals to rise to about A$1.65 billion in 1997/98 from an expected A$1.5 billion in 1996/97.

These strong forecasts were due in part to stronger than expected third quarter results and repeated forecasts by Murdoch himself of 20 per cent profit growth in 1996/97 -- including as recently as February.

But a series of downgrades in late July as word filtered through of the Speed and Volcano-led profit-slide and the actual results earlier on Wednesday have taken the shine from the rosy forecasts made in early 1997.

"You're really looking at next year's results being where people expected it to be this year," said a Sydney-based media analyst.

News Corp's net profit before abnormals rose 2.5 per cent to A$1.295 billion in 1996/97, well below the A$1.35 billion to A$1.5 billion forecast by analysts in early August and well short of Murdoch's 20 per cent profit growth forecast.

"It was disappointing given the forecasts he made so confidently during the course of the year," said one Melbourne media analyst.

News' Fox film studios contributed operating profit of A$133 million for the year, down from A$145 million the previous year and less than half the A$284 million racked up after nine months of the year.

Analysts said News executives had appeared bullish about future growth in the regular post-results tele-conference with analysts. But the analysts said the tone of outlook was no more bullish than previously seen and once the lower base was taken into account, forecasts would have to be downgraded."My biggest concern remains that there is not going to be any profit growth into 1998," one analyst said.

Another said News' new businesses to start in 1997/98 would undermine much of the strong growth from core businesses like newspaper, magazines and US Network television.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.