News Corp revenues fall as the group faces ‘continued headwinds in print advertising’

News Corp has revealed its financial results for the final three months of 2016, noting print advertising challenges, a change in the value of Foxtel and “an impairment of the print-related fixed assets” at the group’s Australian newspaper business.

In a statement to the ASX, News Corp said its revenues for the second quarter of the financial year were US$2.12 billion (AU$2.87 billion), down from US$2.16 billion (AU$2.83 billion) in the year prior.     news-corp-australia-logo-slimmer

The group lost US$219 million (AU$287 million) from continuing operations, compared with US$106 million (AU$139 million) during the same period last year. The loss includes US$537 million (AU$704 million) of non-cash impairments and write-downs and a one-time gain of US$120 million (AU$157 million) as a result of cash proceeds from the sale of REA Group’s European business, the statement said.

Digital revenues, however, increased to 27% of News and Information Services segment revenues, compared with 22% last year.

Commenting on the results, chief executive officer Robert Thomson noted the challenges the global group was facing, including in its Australian operations.

“In the second quarter, we saw the efficacy of our strategic reinvestment and digital diversification. Both were evident in our significantly increased operating profitability in the quarter, despite continued headwinds in print advertising.

“Results were driven by strong performance at our Digital Real Estate Services segment and meaningful revenues at HarperCollins, along with appropriate and ongoing management of the cost base at our news mastheads,” he said.

“This quarter’s results were impacted by non-cash charges because of a change in the carrying value of Foxtel and an impairment of the print-related fixed assets at our Australian newspaper business.”


Thomson also highlighted the increasing importance of real estate services for the media organisation.

“Our core platform has been bolstered by our rapid expansion in digital real estate, which is well on the way to becoming the largest contributor to our profitability. This segment posted another very strong quarter, with a 16% year-over-year revenue increase, improved margins and robust audience gains,” he said.

The results also revealed digital subscribers at News Corp Australia’s mastheads as of December 31, 2016, were 309,200 – compared with 255,800 the prior year, according to internal data.


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