By Lukas I. Alpert
News Corp reported declines in profit and revenue for its latest
quarter in the face of a sluggish economy in Australia, softness in
its book-publishing unit and foreign-currency headwinds.
The New York-based media company, owner of The Wall Street
Journal and HarperCollins Publishers, said net income for its
fiscal second quarter was $85 million, or 14 cents a share, down
11% from $95 million, or 16 cents a share, in the year-earlier
Revenue fell 5.6% to $2.48 billion for the quarter, which ended
Dec. 31. Analysts polled by Factset expected earnings of 14 cents a
share on revenue of $2.52 billion. Excluding impairment and
restructuring charges, the company reported adjusted earnings per
share of 18 cents.
"We expect improvement in the second half as real-estate markets
show signs of gradual recovery, Dow Jones benefits from new content
licensing arrangements and higher digital subscribers, and
HarperCollins capitalizes on an exciting slate of new releases,"
Chief Executive Robert Thomson said in a statement.
News Corp in October reached a deal to let Facebook Inc. feature
headlines from the Journal and other Dow Jones media properties, as
well as the New York Post, in the social-media giant's news
section. Earlier in 2019, the Journal became a launch partner for
Apple Inc.'s news service.
Mr. Thomson said the deals with Apple and Facebook were
"beginning to yield financial dividends."
As part of an effort to simplify its operations, News Corp last
month agreed to sell video-advertising platform Unruly to Tremor
International Ltd., fetching significantly less than it paid for
the British startup five years earlier.
Mr. Thomson said the company is still "engaged in negotiations
for the sale of News America Marketing," its in-store marketing and
Earnings before interest, taxes, depreciation and amortization,
or Ebitda, fell 4% to $355 million in the latest quarter.
Currency fluctuations, particularly weakness of the Australian
dollar, affected revenue negatively by $50 million, or 2% of the
total, the company said. Economic issues in Australia also resulted
in lower subscription revenue for the company's
satellite-television business and reduced revenue to its
real-estate listing business due to weak housing prices.
News Corp's largest unit, the news and information-services
business that includes the Journal, Times of London and New York
Post, reported a 1.3% decline in revenue to $1.24 billion.
Within the segment, Dow Jones and News UK revenue grew 4% and
2%, respectively, while revenue at News Corp Australia and News
America Marketing declined 9% and 4%.
Advertising revenue for the news unit declined 5%, while
circulation and subscription revenue rose 3% overall. At Journal
parent Dow Jones, circulation revenue rose 5%, boosted in part by a
17% year-over-year increase in digital subscribers, as well as
subscription price increases.
The Journal added 75,000 digital subscribers from the end of the
previous quarter, bringing its total to 1.929 million. That was
more than double the 36,000 new subscribers added in the previous
quarter. As of the end of December, the Journal also had 772,000
Advertising revenue at Dow Jones fell 5% on the year, the
Ebitda rose 27% at the news unit to $142 million, primarily due
to a one-time warranty claim settlement related to the company's
print business in the U.K., greater contributions from the
company's British titles and from Dow Jones and lower losses at the
New York Post.
Revenue in the company's book publishing unit fell 11% due to
challenging comparisons to the year-earlier period, which saw high
sales of "Homebody: a Guide to Creating Spaces You Never Want to
Leave," by Joanna Grimes and "Girl, Wash Your Face," by Rachel
The digital real-estate business reported a 5% decline in
revenue to $294 million and a 2% drop in Ebitda to $118
Revenue at News Corp's subscription-video-services unit fell 11%
to $501 million and Ebitda fell 17% to $70 million.
Write to Lukas I. Alpert at firstname.lastname@example.org
(END) Dow Jones Newswires
February 06, 2020 19:07 ET (00:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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