News Corp profit drops; results top Wall Street (Update)

May 08, 2014 by Ryan Nakashima
In this Oct. 12, 2011 file photo, people walk in front of the News Corporation building in New York. News Corp. reports quarterly earnings on Thursday, May 8, 2014. (AP Photo/Kathy Willens, File)

News Corp.'s net income fell in its fiscal third quarter, but its results beat Wall Street expectations due to better book publishing thanks to thriving sales of the "Divergent" series, which was launched as a movie in March.

The lift from books underlined News Corp.'s announcement last week that it would purchase romance fiction publisher Harlequin Enterprises for $415 million from Canada's Torstar Corp.

Chief Executive Robert Thomson told analysts on a conference call that there's "no doubt that book publishing is transitioning successfully to digital" and said Harlequin's international presence in 34 languages will help its HarperCollins division, which primarily publishes in English.

News Corp. also reported gains in its Australian real estate website division, which blunted a steep decline in its newspaper business, where revenue fell 9 percent. The company's flagship publication is The Wall Street Journal. Australian newspapers caused most of the decline, as double-digit percentage advertising revenue declines were worsened by currency fluctuations.

Net income in the quarter through March came to $48 million, or 8 cents per share, down from $323 million, or 56 cents per share, a year ago. Last year, News Corp. booked a gain on the sale of its stake in New Zealand pay TV operator Sky Network.

Excluding that and other items, adjusted earnings fell 2 cents to 11 cents per share. Analysts polled by FactSet predicted 2 cents per share.

Revenue fell 5 percent to $2.08 billion, still above the $2.07 billion expected.

New York-based News Corp., which is controlled by Rupert Murdoch, saw its shares rise 35 cents, or 2.1 percent, to $17.46 in after-hours trading following the release of results. Earlier they closed up 3 cents at $17.11 in the regular session.

Douglas Arthur, an analyst with investment banking adviser Evercore, said in a research note the results showed a "significant upside surprise" for the second quarter in a row despite the drag of Australian newspapers. He called the current fiscal year "a year of transition" as the company operates on its own after splitting off from the more profitable TV and movie assets held by Twenty-First Century Fox Inc. last year.

Explore further: EBay takes first quarter loss on tax charge

not rated yet
add to favorites email to friend print save as pdf

Related Stories

EBay takes first quarter loss on tax charge

Apr 29, 2014

EBay recorded a loss in the first-quarter due to a hefty tax charge on foreign earnings, but revenue jumped as more customers shopped at its e-commerce site and its PayPal payments business stayed strong.

Comcast 1Q earns beat Street on upbeat NBC result

Apr 22, 2014

Comcast's first-quarter net income rose by nearly a third as ad revenue surged at broadcast network NBC, helped by the Winter Olympics in Sochi and Jimmy Fallon's elevation as host of "The Tonight Show."

News Corp fiscal 2Q earns top expectations

Feb 06, 2014

News Corp., the publishing company controlled by Rupert Murdoch, reported second-quarter earnings that exceeded Wall Street forecasts while revenue declined as expected, reflecting slower advertising sales.

Oracle fiscal 3Q net income rises 2 pct

Mar 18, 2014

Oracle said Tuesday its fiscal third-quarter net income rose 2 percent, helped by higher cloud software subscription revenue, but investors wanted more growth and the company's stock fell in late trading.

Recommended for you

Microsoft to tap $2-trillion Indian cloud market

2 hours ago

Microsoft announced plans Tuesday to offer its commercial cloud services from Indian data centres as it seeks to tap what it calls a $2-trillion market in the country where Internet use is growing rapidly.

Canada demands Google, Netflix data, sets deadline

6 hours ago

Canada's broadcast regulator on Monday gave American companies Google and Netflix a three-day deadline to turn over subscriber data or have their testimony expunged from a major public hearing, media reported.

User comments : 0