Tanking newspaper advertising revenue pulled down News Corp’s first quarter results with a 3 per cent fall in total revenue to $2.07 billion for its first three months of operation.
Net income was $38 million compared with a net loss of $83 million a year ago. And first quarter EBITDA (earnings before interest, taxes, depreciation, and amortisation) was $141 million, a 58 per cent improvement compared to $89 million in the prior year.
Australian newspaper revenues fell 22 per cent and accounted for the majority of the decline in the news and information division compared to the prior year.
Reporting for the first time as a new entity, News Corp said most of the revenue decline reflects lower advertising revenues, foreign exchange fluctuations and the sale of the Dow Jones Local Media Group.
These declines were partly offset by FOX SPORTS Australia and continued strength in the Digital Real Estate Services segment.
Circulation and subscription revenues declined 6 per cent due to lower print volume and a decline in institutional revenues at Dow Jones, partially offset by cover price increases at the UK and Australian newspapers as well as improvements at The Wall Street Journal and WSJ.com.
CEO Robert Thomson says the first quarter says the first quarter as the new News was the beginning of a journey in digital development.
“There are certainly headwinds in Australia, magnified by inauspicious foreign currency movements, but we have been consistently cost conscious and are transforming our publishing operations longer-term into multi-platform businesses,” says Thomson, an Australian journalist.
“We are vigorously pursuing a strategy to improve our revenue prospects and we look forward to updating all in future quarters.”
Revenues declined 4 per cent compared to the prior year when excluding the impact of acquisitions, divestitures and foreign exchange fluctuations.
The Company reported first quarter EBITDA of $141 million, a 58 per cent increase as compared to $89 million in the prior year.
An unexpected bonus was lower costs associated with the UK News of the World hacking scandal.
- Revenues of $2.07 billion compared to $2.13 billion in the prior year
- Reported Total Segment EBITDA of $141 million compared to $89 million in the prior year
- Reported Net Income of $38 million compared to a Net Loss of ($83) million in the prior year
- Diluted Earnings Per Share $0.05 compared to ($0.16) in the prior year