NEWS Corp's Australian operation, News Ltd, posted a $476.7 million loss for the financial year to June 30, after slashing the value of its newspaper mastheads following a double-digit decline in revenue.

The company reported that revenue declined 11 per cent to $2.6 billion, while operating income decreased 23.5 per cent to $493.6 million as ''advertising revenues declined during the fiscal year driven by negative consumer sentiment''.

News Ltd mastheads are feeling the pinch. Credit:Wolter Peeters

News Ltd, which was the springboard for Rupert Murdoch's global expansion, is due to be folded into the publishing business that will be spun off as a separate listed entity next year from News Corp's film and television business.

The manoeuvre is designed to protect News Corp's more valuable film and broadcast assets from the hacking scandal engulfing its newspapers in the UK.