News Corporation saw a 5 per cent lift in revenues to $US1.98 billion in the third quarter, with encouraging gains in circulation and digital subscriptions in the News and Information division. News broke even from continuing operations, compared to a $US128 million loss in the previous corresponding period. This was achieved through growth in Digital...
News broke even from continuing operations, compared to a $US128 million loss in the previous corresponding period. This was achieved through growth in Digital Real Estate Services and Book Publishing, as well as the lift in News and Information revenues.
Subscription revenue increased 3 per cent over the previous period last year, once the negative impact of $US18 million in currency fluctuations was removed. The fluctuations pushed subscription revenue to a 1 per cent decrease in real terms.
News and Information revenues increased $US32 million, or 3 per cent, compared to the prior year, but came in at a 1 per cent gain on adjusted figures.
Advertising revenues increased 4 per cent due to higher in-store product revenues at News America Marketing, primarily driven by an increase in client spending and, to a lesser extent, timing-related benefits.
There also was a $US21 million from the acquisition of Wireless Group and $20 million from the acquisition of ARM in from APN News & Media in Australia. These factors were partially offset by weakness in the print advertising market.
Earnings before interest, tax, depreciation and amortisation for the News and Information in the quarter were $US123 million, compared to $US187 million in the prior year.
Digital revenues represented 24 per cent of segment revenues in the quarter, compared to 23 per cent in the prior year. Digital revenues for Dow Jones and the newspaper mastheads represented 29 per cent of their revenues.
In the quarter:
In the Digital Real Estate division, revenues increased $US25 million, or 13 per cent, compared to the prior year, primarily due to the continued growth at REA Group in Australia and Move in the US. The growth was partially offset by the $US9 million and $US4 million impact from REA Group’s divestiture of its European business and Move’s sale of its TigerLead product, respectively. Segment EBITDA in the quarter increased $US36 million, or 92 per cent, compared to the prior year,
In the quarter, revenues at REA Group increased 10 per cent to $US117 million from $US106 million in the prior year due to an increase in Australian residential depth revenue, driven by favourable product mix and pricing increases, and a $US6 million impact from favourable foreign currency fluctuations.
The Book Publishing segment was up 4 per cent to $US374 million.
Commenting on the results, chief executive Robert Thomson said the company had benefitted from progress in its quest to be more digital and global, as well as tangible improvement in operating efficiencies.
“We posted solid revenue growth and substantial earnings growth, highlighted by momentum in Digital Real Estate Services. At News and Information Services, while print advertising remains volatile, we saw some moderation this quarter,” he said.
“Overall, the segment was a source of growth this quarter – in both revenues and profitability – driven by, in particular, the robust performance of in-store product at News America Marketing, digital subscriber gains of more than 300,000 at the Wall Street Journal and the benefits of ongoing cost control.
“The quarter was also characterised by an intensifying social and commercial debate over the dysfunctionality of the digital duopoly, and the lack of transparency in audience and advertising metrics.
“With brands in search of authenticated audiences and trusted advertising environments, we firmly believe that our mastheads offer veracity and value, and we are rapidly developing a new digital ad platform to offer clearly defined demographics from across our range of prestigious properties.”
News Corp’s sister company, 21st Century Fox, reported a rise in revenue in the latest quarter, lifted by higher advertising and affiliate fees in its television segments. Revenue in Fox’s television business surged 30 per cent to $US1.69 billion, fuelled by a 39 per cent increase in advertising revenue from events such as the Super Bowl and an additional NFL playoff game in the quarter. During the quarter, the company booked about $US10 million in costs related to settlements of pending and potential litigation on sexual harassment claims following the July 2016 resignation of Fox News chief executive Roger Ailes. In all for the fiscal third quarter ended March 31, Fox earned $US799 million, down from $US841 million a year ago.
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