News Corporation has posted a loss of $US149 million for the third quarter, after the settlement of a long-running lawsuit and currency fluctuations took a toll on the results. The loss compares to a profit of $US23 million in the corresponding period last year. It follows a 7 per cent drop in revenues for the...
The loss compares to a profit of $US23 million in the corresponding period last year. It follows a 7 per cent drop in revenues for the quarter to $1.9 billion.
News Corp chief executive Robert Thomson said the results were materially affected by a one-off payment of $US280 million at News America Marketing to resolve a legacy lawsuit and currency headwinds that delivered a $US72 million hit to revenues.
Mr Thomson said that while the results were disappointing, the company was on track to see improvements in the fourth quarter from the expansion of its digital real estate business and cost saving initiatives taking firmer root.
Revenues for the News and Information Services segment dropped $US122 million, or 9 per cent, for the quarter compared to the previous year. Total segment advertising revenues declined 15 per cent, or 11 per cent excluding the impact of $US23 million from negative foreign currency fluctuations.
Circulation and subscription revenues declined 4 per cent, and would have been flat excluding the impact of $19 million from currency fluctuations.
Growth in paid digital subscribers at The Wall Street Journal and in Australia, higher subscription pricing and selected cover price increases in the UK and Australia offset print volume declines and the impact from the change in the digital strategy at The Sun.
At Dow Jones, the company saw stable performance at the professional information business. In the third quarter, Dow Jones’ digital revenues represented more than 50 per cent of total revenues and one-third of advertising revenues.
Mr Thomson said the company’s pursuit of digital growth continued apace. “We are particularly focused on driving mobile revenue growth, and are pleased with the results at realtor.com, where the mobile audience grew close to 50 per cent this quarter, and now represents 60 per cent of page views and the majority of leads,” he said.
“Despite the difficult conditions for advertising, we saw both Dow Jones and News Corp Australia contributing to segment EBITDA growth, thanks to an increase in paid digital subscribers, digital advertising growth and ongoing cost reduction to improve efficiency.
“While we believe in the strength of our print properties, we are also investing energetically in the rapid pursuit of digital which is clearly evident in the transition at Dow Jones.”
Book publishing revenues were down $US44 million, or 11 per cent, compared to the previous quarter because of the success of American Sniper, by Chris Kyle, and the Divergent series, by Veronica Roth, the previous year, lower e-book sales and negative foreign currency fluctuations
In Digital Real Estate Services, revenues in the quarter increased $US24 million, or 14 per cent, compared to the previous year, primarily driven by continued growth at REA Group Limited and Move.
REA had another solid quarter, with revenues growing by 20 per cent in local currency to $147 million. REA also completed the $480 million acquisition of the leading digital platform in south-east Asia, iProperty, which will drive significant growth in the region.
Fox Sports continues to perform well, with EBITDA up 33 per cent in local currency. Meanwhile Foxtel grew its subscriber base by 6 per cent over the quarter and grew revenues by 2 per cent in local currency.
21st Century Fox posted its third quarter results the previous day. The success of the film, Deadpool and higher affiliate fees and advertising revenue helped the entertainment group lift its total revenue for the period to $US7.23 billion, up $US388 million, or 6 per cent.
However, net income for the quarter was down 13 per cent compared with the third quarter last year at $US841 million. Profit for the nine months until the end of March totalled $US2.4 billion, down from $US8.5 billion because of the sale of Sky Deutschland and Sky Italia to BSkyB.
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