News Corp Profit Falls, But Tops Estimate

(RTTNews) - News Corp (NWS, NWSA) Thursday reported a plunge in third-quarter profit, hurt by a five percent decline in revenue as fewer advertisers patronized its newspapers, while the prior year quarter included gains from the sale of its stake in Sky Network Television. However adjusted earnings and revenue for the quarter topped Wall Street estimates.

The decline in quarterly revenue was due to foreign currency fluctuations, lower ad revenue at the News and Information Services segment and the sale of the Dow Jones Local Media Group, the company said in a statement.

But there was some momentum at the company's smaller segments of Book Publishing and Digital Real Estate Services.

This is the third quarter News Corp is releasing results as a separate entity after the spin-off of its entertainment and TV assets into 21st Century Fox.

News Corp, which owns newspapers such as the Wall Street Journal and the New York Post, reported third-quarter net income to stockholders of $48 million or $0.08 per share. This compares with a profit of $323 million or $0.56 per share last year, when it recorded gains on the SKY Network Television deal.

Excluding items, adjusted earnings for the quarter were $66 million or $0.11 per share, compared with $73 million or $0.13 per share a year ago.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

News Corp, which also owns book publisher HarperCollins, posted third-quarter revenues of $2.08 billion, a decline from $2.18 billion in the prior year. Seven analysts had a consensus revenue estimate of $2.07 billion for the quarter.

Revenue at the company's key News and Information Services revenue slid 9 percent from a year ago. News Corp said that ad revenue at its print publications were weak and it grappled with foreign currency fluctuations.

Also circulation and subscription revenue was lackluster due partly to a decline in Institutional revenues at Dow Jones, partly offset by cover price increases in the U.K. and at many Australian newspapers as well as higher subscription pricing at the Wall Street Journal.

At smaller businesses, Cable Network Programming revenue declined 10 percent even as it saw higher digital platform subscribers and increased affiliate pricing. Meanwhile Digital Real Estate Services gained 19 percent and Book Publishing revenue was up 14 percent.

Last June, Rupert Murdoch split News Corp into two public companies after concerns from shareholders in response to its recent scandals and to unlock even greater shareholder value.

Rupert Murdoch went on to head the more profitable media and entertainment business, 21st Century Fox Inc (FOXA), while the other company, the new News Corp, held the publication assets and is being led by CEO Robert Thomson.

Thomson is striving to expand the company's digital and international businesses. Earlier this month, News Corp agreed to acquire Harlequin Enterprises from Torstar Corp for $415 million. Harlequin is a publisher of women's fiction and this acquisition will extend HarperCollins' global platform.

News Corp stock closed Thursday at $17.11, up $0.03 or 0.18%, on a volume of 3.9 million shares on the Nasdaq. In after hours, the stock gained $0.19 or 1.11%.