News Corp profit beats as cost cuts in news business pays off

By far and away the largest division is News and Information Services, which includes Dow Jones, the Wall Street Journal, newspapers such as the New York Post, The Australian, The Daily Telegraph, Courier Mail and Herald Sun and the UK’s The Sun and The Times.

As a result of the writedown and other one-time charges, News Corp posted a loss of $379m for the quarter ending June 30, following a profit of $12m in the same period past year. The company had revenue of $2.14 billion for the quarter, compared to the consensus estimate of $2.19 billion.

News Corp (NASDAQ:NWSA) traded up 1.15% during midday trading on Wednesday, reaching $14.12. Additionally, the Company is reviewing strategic alternatives with respect to Amplify’s remaining digital education businesses.

The media company’s diversification into areas like property has, in part, helped it offset declining revenues in print.

Citi analyst Justin Diddams had forecast fiscal year net profit after tax of $US304.5 million, with consensus being $US271.8 million, revenue of $US8.64 billion and a final dividend of US10¢. A 10 per cent slide in advertising revenues pushed News Corp’s newspaper revenues and earnings down for the year, driven by weakness in print ads and adverse currency movements. Also, News Corporation acquired Move, one of the leading providers of online real estate services. Further, News Corporation acquired VCCircle Network and increased its stake in APN News and Media Limited, an Australian media company, to 14.99%. Adjusted EPS (as defined in Note 3) were $0.47 compared to $0.46 in the prior year.

Revenue for digital real estate services jumped 67 percent to $189 million.

The Cable Network Programming segment’s revenues came in at $133 million, down 2% from the year-ago quarter.

News Corporation ended the quarter with cash and cash equivalents of $1,951 million, amount of $63 million due from Twenty-First Century Fox, and shareholders’ equity of $11,945 million, excluding non-controlling interest of $171 million.

Shares of the company, controlled by Rupert Murdoch, rose about 4% in extended trading. The group had purchased an education group called Wireless Generation for $360m in 2010.

Earnings contribution from Foxtel, which is 50 per cent owned by News Corp, was down 35 per cent from the previous year from to $US58 million.