Fourth-quarter earnings reports from two of the largest media companies -- News Corp. ( NWS) and its majority-owned Fox Entertainment ( FOX) unit -- painted a bleak picture, although both noted recent improvements in the ad market.

Fox Entertainment reported lower fourth-quarter earnings from a year ago but said revenue was up. Net income fell to $40 million, or 5 cents a share, compared to $174 million, or 24 cents a share, in the year-ago period. But revenue was up 11% to $2.4 billion from $2.2 billion at the same time last year.

Analysts were expecting earnings of 6 cents a share and revenue of $2.4 million, according to Thomson Financial/First Call. In recent trading, shares of Fox were up a penny, or 0.05%, at $19.91.

Separately, News Corp. reported a loss of $1.7 billion, versus a loss of $265 million a year ago.

The fourth-quarter loss primarily reflects a writedown for the company's investment in Gemstar ( GMST), News Corp. said.

"Obviously, we were disappointed by the write-downs of our investment in Gemstar, which we took during the year due to that company's declining share price," said Rupert Murdoch, CEO of News Corp.

Excluding the loss, News Corp. earned $114 million, or 8 cents per ADR, compared to $145 million, or 12 cents per ADR. Revenue rose 11% to $3.8 billion from $3.4 billion in the year-ago period.

On a conference call with analysts, News Corp. was optimistic about upcoming trends in the advertising market. That was lifting its stock up 28 cents, or 1.35%, to $21.03 in morning trading.

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