News Corp revenue falls in first reporting quarter on ad weakness

In the inaugural quarter, News Corp’s revenue fell 2.8% to $2.07 billion, reflecting lower demand for print advertising. 

The news segment, which owns papers in the US, UK and Australia, had a revenue decline of 10% to $1.5 billion in the three months ended 30 September. Operations in Australia had a particularly bad patch. Advertising slumped 12%, while sales from circulation and subscription fell 6%. 

News Corp said Australian newspapers revenues declined 22% and accounted for the majority of the revenue decline compared to the prior year. Total News & Information Services segment advertising revenues declined 12%, driven by weakness in Australia and moderating declines at Dow Jones and News UK versus the prior year, offset by continued growth at News America Marketing driven by improving sales performance from its in-store business. 

“Circulation and subscription revenues declined 6%, due to lower print volume and a decline in Institutional revenues at Dow Jones, partially offset by cover price increases at the U.K. and Australian newspapers as well as improvements at The Wall Street Journal and WSJ.com. Foreign exchange fluctuations had a 4% negative impact on advertising revenues and a 3% negative impact on circulation and subscription revenues,” the company said in an official statement. 

News and Information Services segment,foreign exchange fluctuations and the sale of the Dow Jones Local Media Group (“LMG”), partially offset by the inclusion of Fox Sports Australia, which News Corp began consolidating in November 2012 following the Consolidated Media Holdings (CMH) acquisition, and continued strength in the Digital Real Estate Services segment. 

News Corp separated from 21st Century Fox Inc. at the end of June to hold mostly publishing assets. Besides owning newspapers, News Corp holds the Australian TV business, which includes a 50% stake in pay-TV firm Foxtel. At the time of split of News Corp, the publishing business got a capital infusion of $2.6 billion in cash. 

In the first quarter of fiscal 2014, revenues were $132 million and segment EBITDA was $29 million, reflecting the consolidation of Fox Sports Australia in November 2012. On a stand-alone basis, strong growth in advertising revenues from improved ratings and increased government election spending, coupled with higher subscription revenues, was offset by foreign exchange fluctuations, leading to revenues being flat versus the prior year. 

Segment EBITDA declined 31% on a stand-alone basis, primarily driven by the timing of higher expenses associated with the National Rugby League rights contract which began in March 2013. Excluding the impact of foreign exchange fluctuations, revenues increased 14% from the prior year and segment EBITDA decreased 21%. 

Revenues in the quarter decreased $24 million, or 7%, compared to the prior year as improved e-book sales were more than offset by the divestiture of the Women of Faith live events business, the decision to exit the third party distribution business in the U.S. and softness in the Christian publishing marketplace as compared to the prior year. E-book sales improved by over 30% versus the prior year period and represented 22% of revenues, up from 15% in the prior year. Segment EBITDA increased $3 million, or 8%, from the prior year benefiting from the higher contribution to profits from e-books and ongoing operational efficiencies, which were partially offset by the weaker top-line this quarter. Excluding the impact of acquisitions, divestitures, and foreign exchange fluctuations, revenues decreased 5% and segment EBITDA increased 8%.

Source: http://cablequest.org/news/international-news/item/3542-news-corp-revenue-falls-in-first-reporting-quarter-on-ad-weakness.htmlSource: http://cablequest.org/news/international-news/item/3542-news-corp-revenue-falls-in-first-reporting-quarter-on-ad-weakness.html