News Corp profits beat estimates despite advertising fall

News Corp Chairman Rupert Murdoch Rupert Murdoch still controls most of News Corp

Related Stories

Rupert Murdoch's News Corp has posted better-than-expected profits, even as advertising revenues continue to fall at its newspaper businesses.

Net income was $151m (£93m) in the quarter ending in December, which was higher than analyst estimates.

Revenue fell by 4% to $2.24bn, largely due to reduced advertising sales at the media company's Australian newspapers.

News Corp's chief executive Robert Thompson described the advertising market as "challenging".

"We are continuing to be disciplined on costs, while making opportunistic investments that will extend our revenue reach," he said in a statement.

"The digital transformation is certainly underway, as the acquisition of Storyful and the robust growth in digital sales at HarperCollins attest."

Shares of News Corp rose by as much as 5% in after-hours US trading following its earnings announcement.

Media empire
"Divergent" author Veronica Roth The teen series "Divergent" is one of HarperCollins' best-selling titles

This is the second time News Corp is reporting results since splitting its publishing and entertainment divisions into two separate companies in June last year.

The publishing conglomerate owns a stable of titles including the Wall Street Journal, New York Post and Times newspaper in the UK.

It also has a loss-making education business Amplify and Australian cable television operations.

Under its entertainment arm, News Corp owns the 21st Century Fox film studio and television channels.

However, it was its book publisher HarperCollins that contributed most strongly to News Corp's bottom line.

Sales of the "Divergent" teen novel series by Veronica Roth and "The First Phone Call from Heaven" by Mitch Albom helped lift HarperCollins revenues 4% higher to $14m.

Australian newspaper revenues were the biggest drag on profit - they fell by 17%, of which 10% was due to the impact of the stronger Australian dollar.

Lower revenues at Dow Jones, its financial news and information service, were also cited as a source of weak performance.

Changing landscape

News Corp logo News Corp is one of the world's biggest media conglomerates

An increasing number of people are consuming their news on the internet, instead of through traditional forms such as newspapers, television and the radio.

Media outlets such as News Corp have been struggling to adapt to the changing consumer landscape.

As part of this shift, News Corp bought Dublin-based social media news agency Storyful for $25m last December.

It has also experimented with charging readers for access to their website articles, and recently raised the subscription prices for the online version of the Wall Street Journal.

However, the firm has yet to find success with fully monetising its online offerings, which draw lower advertising rates than its print publications.

News Corp has also been struggling with lower print circulation numbers, which it has tried to offset by raising the cover price of newspapers such as The Sun in the UK.

Overall, newspaper publishing accounts for more than 70% of the company's revenue.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories


BBC Business Live

    MARKET REPORT 07:50:

    It has been a shaky session for shares in Tokyo, the Nikkei 225 index closed 2.6% lower at 15,661. The Hang Seng in Hong Kong, which has fallen more than 9% since hitting a six-month peak in September amid pro-democracy protests, is closed for a public holiday.

    Via Twitter BBC Radio 4

    tweets: "'Downgrade could follow Brexit' says Standard and Poor's Mortiz Kraemer @EthicalMan"

    LORD HILL 07:33: BBC Radio 4
    Lord Hill

    "He showed no grasp of the issues," is the verdict of Phillippe Lamberts, co-chair of the Greens in the EU parliament, on Lord Hill's appearance before European members of parliament on Wednesday. "Behind his charm there was apparently little knowledge of the subject matter at hand," Mr Lamberts said on Today.


    So, will ordinary folk be able to buy shares in the Virgin Money offering? Not until they start trading. The offer is open to "certain institutional investors". Although they are giving staff £1,000 of shares apiece.


    Virgin Money has announced details of its share sale. The firm hopes to raise £150m from the sale of about 25% of the bank, it said. If the sale is successful the Treasury will receive £50m, which was part of the deal when Virgin Money took over assets from Northern Rock.

    ECB MEETING 06:57: BBC Radio 4
    Eurozone sign

    The European Central Bank (ECB) hosts its monthly meeting in Naples today, amid worries that the eurozone economy is deteriorating. "The ECB can buy time for governments to act... but it cannot generate lasting growth," says Moritz Kraemer from Standard & Poor's on Today. He says Europe needs to reduce the debt load of households, firms and governments.

    PIMCO EXODUS 06:48: BBC Radio 4

    Investors have taken £14.5bn out of the investment firm Pimco since its founder Bill Gross resigned last week. Andrew Balls, chief global investment office at Pimco, says "it's calmed down very quickly though". The departure was not a huge surprise, he reckons. Mr Balls reminds listeners to Today that Mr Gross was 70 "and wouldn't be there [Pimco] for ever". Ouch.

    PARIS MOTOR SHOW 06:40: BBC World News
    Rolls Royce chief executive, Torsten Muller-Otvos

    (Imagine a German accent) "We are on the roll ja," says the German chief executive of Rolls Royce Motor Cars, Torsten Muller-Otvos on World Business Report. He expects the company to have another record year. He is standing in front of a limited edition Rolls-Royce Phantom, only 20 were made and, sorry readers, they are all sold out.

    SHARING ECONOMY 06:31: Radio 5 live

    What is the sharing economy? "The sharing economy defines the assets you own and skills you have" says Debbie Wosskow, chief executive of Love Home Swap on 5 live. (Any the wiser?) Customers need protection, but regulation needs to keep up with this emerging market, she says. She's writing a review into the sharing economy.

    CONSERVATIVE CONFERENCE 06:17: Radio 5 live

    Lord Digby Jones, the crossbench peer and businessman is on 5 live after his appearance at the Conservative Party conference. He is worried people think money grows on trees, rather than coming from business, but also says business should mend its image: "I don't want chief executives paying themselves big bonuses [right now]. They may deserve it, but it sets a lousy example."

    ARGENTINA 06:13: Radio 5 live
    President Cristina Fernandez

    The boss of Argentina's central bank has resigned. Juan Carlos Fabrega had been calling the government to tackle inflation and rein in spending. That created conflict with the nation's economy minister. The BBC's South American Business Reporter Katy Watson says the resignation doesn't make President Cristina Fernandez de Kirchner look good either.

    PARIS MOTOR SHOW 06:07: Radio 5 live

    Jurgen Stackman, chairman of carmaker Seat is on Radio 5 live. Ten years ago electric vehicles were seen as the future, so what went wrong? Industry watchers were very optimistic about the speed of people picking them up, he says. Electric cars still have mileage and range limitations and families with one car don't want to rely on an electric car, he adds.

    US SHARES SLIDE 06:00: BBC World News
    New York Stock Exchange

    There were sharp losses for US shares overnight. On World Business Report, Michael Hewson, chief analyst at CMC Markets reminds us that the US market has had a good run recently. But there is not much to be positive about at the moment, he says. The recent economic data from China and Japan has not been great. Traders are also preparing for higher interest rates in the US, Mr Hewson says.

    06:00: Howard Mustoe Business reporter

    Good morning. You can get in touch via email and on twitter @BBCBusiness

    06:00: Ben Morris Business Reporter

    There were sharp losses for US shares overnight, so it will be interesting to see how Europe responds to that later. Plus we'll have reports from the Paris Motor Show. It should be a fun morning, so stay with us.



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.