News Corp Earnings Down, Revenue Up Slightly In Second Quarter
The company was hit by lower ad revenues at its newspapers, currency losses and more costs from the U.K. scandal
News Corp, hit by lower ad revenues at its newspapers and currency losses, reported lower net income from the second quarter of 2015 on Thursday but a slight increase in revenue.
News Corp, which was spun off from Fox's entertainment assets in 2013, reported $142 million in net income compared to $150 million in the same quarter of the prior year. That means it had earnings of 24 cents per share compared to 26 cents per share in fiscal 2014.
Total second quarter revenue was $2.28 billion, a 2 percent increase over the prior year revenues of $2.24 billion.
"Most of our business are delivering solid results," said CEO Robert Thomson on a conference call with analysts, adding that they did well despite a difficult advertising market.
News Corp operates newspapers and digital services in the U.K., Australia and the U.S., including The Wall Street Journal. Thompson said the ad market in the U.K. has been particularly difficult but said The Times is the only newspaper there which has seen gains in readership.
The company said the majority of revenue increases was the result of improved performance by the book publishing and digital real estate services segments.
This was the first second quarter since News Corp acquired realtor.com, which the company said has exceeded its expectations in revenue growth.
Thompson praised the performance of recently acquired Harlequin Books, as well as Harper Collins. He said they benefit from huge sales of the book American Sniper, which has sold 3.9 million copies so far, and sales continue.
He also singled out the success of the Divergent books, which sold 1.2 million copies in the second quarter. He predicted even more sales when the sequel Insurgent comes out next month.
The company was hit with additional charges of $13 million and $19 million in fees and costs related to the U.K. newspaper scandal.
On Wednesday, News Corp officially filed a notice that Saudi billionaire Al-Waleed bin Talal sold $190 million worth of his stock in News Corp, reducing his stake to about one percent of the company's equity.