News Corp revenue misses on weak demand for print advertising

A passer-by in front of the News Corporation building in New York June 28, 2012. — Reuters pic
A passer-by in front of the News Corporation building in New York June 28, 2012. — Reuters pic

NEW YORK, Aug 11 — News Corp yesterday reported fourth-quarter revenue that missed estimates as the owner of the Wall Street Journal grapples with a declining demand for advertising in the print industry.

The company, which owns Dow Jones Newswires, has been reducing staff and implementing other cost-cutting measures in its Dow Jones division, which includes the Wall Street Journal, while building up its digital real estate business.

Revenue from its digital real estate services unit — which consists of REA Group Ltd, a real estate advertising company in Australia — rose about 10 per cent to US$251 million (RM1.07 billion) beating estimates of US$243.2 million, according to financial data and analytics firm FactSet.

The first quarter should benefit from higher prices for Dow Jones subscriptions as well as increased cover prices in the UK and Australia, the company said on a post-earnings call.

“We assume continued print declines into fiscal 2018, but we’ll aggressively seek out cost reductions,” Susan Panuccio, the company’s chief financial officer said on the call.

Advertising revenue, the company’s biggest source of revenue, fell 8.2 per cent to US$737 million in the reported quarter.

Sales of print-based advertising, which has been declining for the last ten years, is expected to fall 13 per cent in the United States in 2017, according to media research firm Magna Intelligence.

The company, controlled by media mogul Rupert Murdoch, reported a net loss available to shareholders of US$430 million, or 74 cents per share, in the fourth quarter ended June 30, compared with a profit of US$89 million, or 15 cents per share, a year earlier.

The company said the loss in the quarter was due to a pre-tax non-cash impairment charge of US$464 million, mainly related to the write-down of fixed assets at its UK newspapers.

News Corp — which owns book publisher HarperCollins and newspapers including the New York Post — said it earned 11 cents per share on an adjusted basis, beating estimates of 9 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue fell 6.6 per cent to US$2.08 billion, missing estimates of US$2.10 billion.

The company’s shares, which closed at US$3.68 yesterday, have risen about 20 per cent this year.

Thomson Reuters, the parent of Reuters News, competes with Dow Jones Newswires. — Reuters 

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