News Corp's quarterly profit declined 52% as foreign-exchange
fluctuations and lower advertising sales offset revenue gains in
book publishing and the digital real-estate business.
Net income for the fiscal third quarter fell to $23 million, or
4 cents a share, from $48 million, or 8 cents, in the same period a
year earlier, the company said Tuesday. Excluding some items,
earnings were 5 cents a share.
Revenue slipped 1% to $2.06 billion, driven primarily by the
negative impact of foreign currency and weak ad sales at the news
and information services segment, which accounts for two-thirds of
News Corp's total revenue.
Analysts polled by Thomson Reuters had expected total revenue of
$2.12 billion in the quarter and per-share earnings of 7 cents.
Earnings before interest, taxes, depreciation and amortization
fell 7% to $163 million, which the company attributed to legal
costs, currency fluctuations and increased stock-based compensation
expenses from the acquisition of Move Inc. Adjusted EBITDA,
however, fell just 1%.
"While the quarter faced some revenue challenges, particularly
at News and Information Services, including currency headwinds, our
adjusted EBITDA was relatively stable, underscoring the strength of
our assets and the diversification of our revenue base," News Corp
Chief Executive Robert Thomson said. "We believe the company is
firmly on track and the signs are positive for year-over-year
EBITDA growth in the fourth quarter."
Revenue at the news and information unit, which comprises the
newspaper holdings in Britain, Australia and the U.S., including
The Wall Street Journal, fell 9% in the quarter as advertising
revenue dropped 12% and circulation and subscription revenue fell
6%. The unit reported a 23% drop in EBITDA to $113 million.
Revenue in News Corp's book publishing segment rose 14% to $402
million, driven in part by continued strong sales of "American
Sniper," the autobiography of slain Navy SEAL sniper Chris Kyle
that is published by HarperCollins and was made into a movie.
Still, declining sales of the "Divergent" series and a 3% drop in
overall e-book sales partially offset gains.
At the small but growing digital real-estate services segment,
revenue in the quarter jumped 67% to $170 million, bolstered by the
inclusion for the first time of full results from Move Inc. News
Corp acquired the network of property listings sites in the U.S.
last year.
Revenue at Amplify Learning, the company's digital-education
business, was flat at $21 million, and the unit posted a loss of
$21 million compared with a loss of $45 million a year earlier.
News Corp said it spent around $15 million in the quarter in
costs related to the phone-hacking scandal at the now-defunct News
of the World tabloid in the U.K.
News Corp's Class A shares are down 7.9% in the past year. The
stock was unchanged in late trading.
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