News Corp. Profit Trails Estimates on Advertising Declineby
Company cites weak print advertising, foreign exchange impact
Revenue of $2.01 billion falls short of analysts' estimates
News Corp., the Wall Street Journal and New York Post publisher controlled by billionaire Rupert Murdoch, reported quarterly earnings that missed analysts’ estimates, dragged down by a decline in advertising revenue and the impact from the strong dollar.
Profit, excluding some items, was 5 cents a share in the fiscal first quarter ended Sept. 30, trailing the 6-cent average of projections compiled by Bloomberg. Revenue fell 4 percent to $2.01 billion, the New York-based company said Wednesday in a statement, the third straight quarterly decline. That compared with an average projection of $2.08 billion.
News Corp. is trying to boost digital and international sales to compensate for declining print revenue at its newspapers as readers increasingly get their news online. Sales at the news unit, which contributes about two-thirds of revenue, dropped 11 percent to $1.29 billion. Advertising revenue fell 13 percent while circulation and subscription sales declined 6 percent. News Corp., which makes about 55 percent of its annual sales outside of North America, gets hurt when it converts revenue from countries with weaker currencies into dollars.
The shares were unchanged in late trading after the results. The stock has dropped 2.2 percent this year, while the Standard & Poor’s 500 Index gained 2 percent.
The Journal said in June that it would cut staff and eliminate positions, as well as introduce a global edition for readers in Europe and Asia.
In September, News Corp. sold its digital-education unit, Amplify Inc., which made up about 1 percent of total revenue, to a management team backed by private investors. News Corp. had invested $1 billion in the project, but found the market for online education was weaker than expected.
Murdoch split his company in two in June 2013, giving 21st Century Fox Inc. the more lucrative entertainment assets and leaving News Corp. with his print properties, which include newspapers and the book publisher HarperCollins.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and services.