Rupert Murdoch's News Corp Swings to First-Quarter Loss, Lower Revenues

Rupert Murdoch Getty H 2016
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The media giant missed on a profit forecast by Wall Street, due in part to foreign currency fluctuations and newspaper advertising woes.

Rupert Murdoch's News Corp, owner of The Wall Street Journal and Dow Jones Newswires, on Monday swung to a first-quarter loss and lower overall revenues, in part due to foreign exchange headwinds from a weakened British pound.

The company posted an adjusted loss per share of 1 cents on $1.97 billion in revenue, compared to a 5 cents per-share profit on revenue of $2.01 billion in 2015. Analysts on average had expected the company to break even on revenue of $1.96 billion.

The company, which secures more than half of its revenue from overseas, during the latest quarter posted a negative impact of $36 million from foreign currency fluctuations.

Digital real estate services revenue, which includes, REA and Move, was up 18 percent to $226 million. News Corp continues to expand its digital content business to diversify away from a newspaper business beset by falling print advertising revenues.

Circulation and subscription revenues also were down 4 percent during the latest quarter. "We continue to push digital, which accounted for 24 percent of segment revenues this quarter, up from 20 percent in the prior year," News Corp CEO Robert Thomson said in a statement. 

The rise in digital real estate services business helped offset a 5 percent fall in news and information services revenue to $1.22 billion, as advertising revenues fell 11 percent, due mostly to weakness in the print advertising market. Ad revenue at The Wall Street Journal fell by 21 percent year-on-year in the first quarter, Thomson told analysts during a conference call.

To deal with print advertising slowing overall performance, News Corp said it plans to cut overall costs by 8 percent, to secure $100 million in annual savings, by the end of fiscal 2018. 

Thomson added during comments to analysts that News Corp was evolving to become more than a newspaper business. "We are a digital real estate company and a global information company, and we're leading the way in finding a digital future for media," he said.

News Corp also recorded a 5 percent fall in book publishing revenue to $389 million, as the year-ago period included revenues from Go Set a Watchman by Harper Lee.