NWS News Corporation

By Lukas I. Alpert 

News Corp reported declines in profit and revenue for its latest quarter in the face of a sluggish economy in Australia, softness in its book-publishing unit and foreign-currency headwinds.

The New York-based media company, owner of The Wall Street Journal and HarperCollins Publishers, said net income for its fiscal second quarter was $85 million, or 14 cents a share, down 11% from $95 million, or 16 cents a share, in the year-earlier period.

Revenue fell 5.6% to $2.48 billion for the quarter, which ended Dec. 31. Analysts polled by Factset expected earnings of 14 cents a share on revenue of $2.52 billion. Excluding impairment and restructuring charges, the company reported adjusted earnings per share of 18 cents.

"We expect improvement in the second half as real-estate markets show signs of gradual recovery, Dow Jones benefits from new content licensing arrangements and higher digital subscribers, and HarperCollins capitalizes on an exciting slate of new releases," Chief Executive Robert Thomson said in a statement.

News Corp in October reached a deal to let Facebook Inc. feature headlines from the Journal and other Dow Jones media properties, as well as the New York Post, in the social-media giant's news section. Earlier in 2019, the Journal became a launch partner for Apple Inc.'s news service.

Mr. Thomson said the deals with Apple and Facebook were "beginning to yield financial dividends."

As part of an effort to simplify its operations, News Corp last month agreed to sell video-advertising platform Unruly to Tremor International Ltd., fetching significantly less than it paid for the British startup five years earlier.

Mr. Thomson said the company is still "engaged in negotiations for the sale of News America Marketing," its in-store marketing and coupon business.

Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 4% to $355 million in the latest quarter.

Currency fluctuations, particularly weakness of the Australian dollar, affected revenue negatively by $50 million, or 2% of the total, the company said. Economic issues in Australia also resulted in lower subscription revenue for the company's satellite-television business and reduced revenue to its real-estate listing business due to weak housing prices.

News Corp's largest unit, the news and information-services business that includes the Journal, Times of London and New York Post, reported a 1.3% decline in revenue to $1.24 billion.

Within the segment, Dow Jones and News UK revenue grew 4% and 2%, respectively, while revenue at News Corp Australia and News America Marketing declined 9% and 4%.

Advertising revenue for the news unit declined 5%, while circulation and subscription revenue rose 3% overall. At Journal parent Dow Jones, circulation revenue rose 5%, boosted in part by a 17% year-over-year increase in digital subscribers, as well as subscription price increases.

The Journal added 75,000 digital subscribers from the end of the previous quarter, bringing its total to 1.929 million. That was more than double the 36,000 new subscribers added in the previous quarter. As of the end of December, the Journal also had 772,000 print subscribers.

Advertising revenue at Dow Jones fell 5% on the year, the company said.

Ebitda rose 27% at the news unit to $142 million, primarily due to a one-time warranty claim settlement related to the company's print business in the U.K., greater contributions from the company's British titles and from Dow Jones and lower losses at the New York Post.

Revenue in the company's book publishing unit fell 11% due to challenging comparisons to the year-earlier period, which saw high sales of "Homebody: a Guide to Creating Spaces You Never Want to Leave," by Joanna Grimes and "Girl, Wash Your Face," by Rachel Hollis.

The digital real-estate business reported a 5% decline in revenue to $294 million and a 2% drop in Ebitda to $118 million.

Revenue at News Corp's subscription-video-services unit fell 11% to $501 million and Ebitda fell 17% to $70 million.

Write to Lukas I. Alpert at lukas.alpert@wsj.com

(END) Dow Jones Newswires

February 06, 2020 19:07 ET (00:07 GMT)

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