News Corp Swings to a Loss
November 07 2016 - 5:40PM
Dow Jones News
News Corp swung to a loss in the September quarter amid a
challenging print advertising environment for its newspaper unit
and foreign currency headwinds.
The company—which publishes The Wall Street Journal as well as
other newspapers in the U.K., Australia and the U.S.—reported a net
loss of $15 million, or 3 cents per share, compared with a
year-earlier profit of $175 million, or 30 cents per share.
Revenue fell 2.4% to $1.97 billion, as gains in the digital
real-estate business weren't enough to offset declines in the news
and book-publishing divisions.
Factoring out certain items, the media company posted an
adjusted per-share loss of 1 cent. Analysts polled by Thomson
Reuters had expected total revenue of $1.96 billion in the quarter
and break-even on an adjusted, per-share basis.
Earnings before interest, taxes, depreciation and amortization
fell 21% on the year to $130 million due to weak print advertising
and increased programming-rights costs at the company's cable
network programming unit.
"While the quarter presented some obvious challenges,
particularly in print advertising and the weakness of the pound
sterling, our revenues were relatively stable, underscoring the
strength and scale of our portfolio and shift to digital," News
Corp Chief Executive Robert Thomson said in a statement.
The news and information-services segment, which accounts for
roughly two-thirds of News Corp's total top line, reported a 5.3%
drop in revenue to $1.22 billion. Advertising revenue fell 11%. The
revenue drop comes amid an accelerating decline in print
advertising spending across the industry.
Last week, New York Times Co. reported a 19% decline in ad
revenue in its third quarter. At Gannett, print ad revenue dropped
15%, dragged down by a 35% plunge in national print ads. Tronc
Inc., owner of the Los Angeles Times and Chicago Tribune, reported
an 11% decline in ad spending in the last quarter.
This has led to a round of belt-tightening among publishers. The
Journal has offered buyouts and warned of layoffs. Gannett recently
announced layoffs of about 380 employees and the Times has said it
expects to downsize and reallocate resources in its newsroom early
next year.
Revenue in News Corp's book publishing segment totaled $389
million, 4.9% lower than the year-earlier period when sales were
helped by the release of Harper Lee's "Go Set a Watchman."
The small-but-growing digital real-estate business also reported
an 18% rise in revenue to $226 million.
Write to Lukas I. Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
November 07, 2016 17:25 ET (22:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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