New Corp’s first quarter profit has risen more than 31 per cent year-on year to $US143 million, boosted by the disposal of the loss-making education business, Amplify, and increased earnings for the company’s digital real estate division.
Total revenues dropped 4 per cent to $US2.01 billion, due mainly to the negative impact of foreign currency movements and weak advertising sales at the News and Information Services division.
Real estate revenues in the September quarter surged 71 per cent to $US79 million, driven primarily by the inclusion of the results of US online property company Move, acquired in November last year. At REA Group in Australia, increased revenues from improved listing volumes in Australia and product penetration fell victim to negative foreign currency fluctuations.
Revenue from News and Information Services, which includes the company’s newspaper holdings in Australia, the UK and the US, fell 11 per cent to $US1.2 billion. Adjusted revenue, however, was down 3 per cent, when compared the previous year.
The company said advertising revenue was down 13 per cent, primarily due to currency issues and weakness in the print advertising market, most notably in Australia. There also were lower revenues at News America Marketing. Circulation and subscription revenues slipped 6 per cent.
Removing the impact of a resurgent US dollar, advertising revenue in the News and Information Services division fell by a more moderate 5 per cent, and circulation and subscription revenue gained 2 per cent.
Book publishing revenues in the quarter increased 1 per cent to $3 million, compared to the prior year, driven by strong sales of Go Set a Watchman by Harper Lee and the inclusion of the results of Harlequin, acquired in August, 2014,
News Corp chief executive Robert Thomson said the company was on track in its transition to a more digital and global future.
‘We are focused on driving sustainable expansion of revenue and profit, and leveraging the potency of our brands, while diligently controlling costs to maximise long-term returns for all investors’ – Robert Thomson
“We are focused on driving sustainable expansion of revenue and profit, and leveraging the potency of our brands, while diligently controlling costs to maximise long-term returns for all investors,” he said.
“Foreign exchange fluctuations negatively impacted reported results, but this should not obscure the progress at many of our businesses.”
Locally, News Corp Australia chief executive Julian Clarke said REA and Fox Sports both grew their revenues and EBITDA, once currency fluctuations were taken into account.
“In local currency, Foxtel revenues increased 3 per cent thanks to the new subscribers it has added, although its EBITDA did decline due to ongoing investment in growth initiatives,” he said.
“While News Corp does not break out publishing finances geographically, the results acknowledge that our local publishing assets are operating in a weak print advertising market.
“While it has been a difficult quarter in this regard, we continue to focus on building our advertising revenues through initiatives such as NewsConnect powered by Quantium, MBX and News Corp Studios, and our acquisitions of Storyful and Unruly.”
Later, REA Group announced a 21 per cent jump in first quarter revenue to $146 million. EBITDA was up 30 per cent to $82 million.
* 21st Century Fox, the entertainment company spun off from News Corp in 2013, reported a larger decline in revenue for the September quarter than expected, because of the timing of key film releases, a weak showing by Fantastic Four and lower syndication revenue.
The business reported $US6.08 billion in revenue in the first three months of the 2016 financial year, down $US406 million, or 6 per cent, from $US6.48 billion in the previous corresponding period.
Film studio unit revenue fell 28 per cent to $US1.79 billion. The prior-year period included the Dawn of the Planet of the Apes theatrical release, which made a strong box-office debut.