News Corp up 2pc despite drop in print earnings

News Corp up 2pc despite drop in print earningsPhoto: Alex Proimos

News Corp has recorded a 2 per cent lift in second quarter total revenues to $US2.28 billion, driven by its book publishing and real estate divisions.

The increase, compared to the same period last year, partially offset lower advertising revenues at the News and Information Services segment and negative foreign currency fluctuations.

Total segment earnings before interest, taxes, depreciation, and amortisation amounted to $328 million, compared with $327 million in the prior corresponding period.

Revenue from the company’s newspapers   which include The Wall Street Journal, and The Times of London, were down 6 per cent to $US89 million for the quarter, ending December 31.  Segment EBITDA dropped 15 per cent to $39 million in the quarter, as a result of lower advertising revenue at News UK and News America Marketing.

In Australia, advertising revenues declined 3 per cent in local currency terms. The good news was that Australian digital subscriptions were approaching 250,000, close to 30 per cent higher than the same period last year.

News Corp chief executive Robert Thomson said the transition of the company since the spin-off of 21st Century Fox was progressing well.

“The development of the new News Corp continued apace in the second quarter as we began the transformation of the just acquired Realtor.com, which has certainly exceeded our expectations in traffic growth in recent weeks,” Mr Thomson said.

“We were clearly buffeted by currency headwinds, but the strength of our brands, the breadth of our reach, the intensifying focus on cost discipline and the power of our portfolio meant that we saw continued growth in revenue and increasing upside in our long-term prospects.

“Our digital personality has evolved quickly, with realtor.com having given us a new and influential platform, digital subscribers on the rise at our news mastheads, robust growth at REA, and healthy e-book sales at HarperCollins.”

Locally, the contribution from REA Group surged 50 per cent to $51 million. Revenues from book publishing, which includes HarperCollins, increased 20 per cent to $78 million.

Mr Thomson said the vision outlined for the company was becoming a reality. “While we have much work ahead, the foundations we have laid over the past 18 months put us in a strong position for enduring success and increased shareholder value,” he said.

Net income available to News Corporation stockholders was $142 million as compared to $150 million in the previous year, primarily due to a higher effective tax rate and lower interest income. Adjusted net income available to News Corporation stockholders was $154 million compared to $179 million in the prior year. Impairment and restructuring charges were $17 million and $36 million in the three months ended December 31, 2014 and 2013, respectively.

The previous day, 21st Century Fox posted better-than-expected results for the December quarter, driven by continued strong growth in its cable network and film studio businesses. Fox reported earnings of $US6.21 billion, or $US2.88 a share, up from $US1.21 billion, or US53c a share in the previous corresponding period.

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