News Corp Reports Loss on Legal Settlement
May 05 2016 - 5:10PM
Dow Jones News
News Corp swung to a loss in the March quarter as the company
took a $280 million charge related to a legal settlement and
turmoil in the advertising markets and foreign-currency
fluctuations continued to weigh on the business.
The company—which publishes The Wall Street Journal as well as
other newspapers in the U.K., Australia and the U.S.—reported a
loss of $149 million, or 26 cents a share, compared with a profit
of $23 million, or four cents a share, a year ago. Revenue declined
7% to $1.89 billion from $2.04 billion.
Adjusted earnings per share were four cents. The adjusted
earnings exclude, among other items, a settlement charge from
payments to resolve a legacy lawsuit and related claims against the
News America Marketing division.
Analysts polled by Thomson Reuters had expected total revenue of
$1.93 billion in the quarter and adjusted per-share earnings of
three cents.
The news and information services segment, which accounts for
two-thirds of News Corp's total revenue, reported a 9% decline in
sales. Advertising revenue declined 15% in the unit.
"With the advertising market in the midst of upheaval,
advertisers and agencies are experimenting with their spend," News
Corp Chief Executive Robert Thomson said in prepared remarks. "We
believe that premium mastheads and audiences are currently
undervalued by agencies, some of which are more focused on fashion
than function."
Mr. Thomson said News Corp is well-positioned to capitalize as
digital marketers look for high-quality content.
The company said digital revenue now amounted to more than 50%
of total revenue at its Dow Jones unit, which includes the Journal,
and that digital advertising contributed about a third of all
advertising revenue.
Revenue in News Corp's book publishing segment fell 11% to $44
million because of lower revenue from the Divergent series and
American Sniper. Operating profit in the segment fell 36%.
Meanwhile, the small-but-growing digital real-estate business
reported a 14% jump in revenue.
Write to Lukas I. Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
May 05, 2016 17:55 ET (21:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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