News' revenues on the way to being real estate driven

Feb 10, 2017 at 01:19 am by Staff


Writing off fixed assets in Australia and a revaluation of its half-share in Foxtel knocked a US$537 million hole in News Corp's financial results for the last quarter.

But there were tax benefits and a gain from the sale of Australian-headquartered REA Group's European businesses.

Chief executive Robert Thomson also reported "continued headwinds" in print advertising. Strategic reinvestment and digital diversification had led to "significantly increased" operating profitability in the quarter.

"Results were driven by strong performance at our digital real estate services segment and meaningful revenues at HarperCollins, along with appropriate and ongoing management of the cost base at our news mastheads," he said.

"Our core platform has been bolstered by our rapid expansion in digital real estate, which is well on the way to becoming the largest contributor to our profitability. This segment posted another very strong quarter, with a 16 per cent year-over-year revenue increase, improved margins and robust audience gains."

The news and information services division, "assertively transitioning to digital", now accounts for 27 per cent of segment revenues (up from 22 per cent).

Thomson said News was "especially confident" in the value of its news brands, given growing consumer demand for accurate and timely journalism. "In fact, the Wall Street Journal now has over 2.1 million paid subscribers and, for the first time, more than 50 per cent of those subscribers are digital.

"Audiences are craving integrity, which is why so many of our mastheads have reported strong growth in readers and subscribers this quarter. And advertisers need a trusted canvas and real results, not the muddled, muddied metrics of many digital platforms."

The company reported fiscal 2017 second quarter total revenues of US$2.12 billion, compared to US$2.16 billion in the prior year. Adjusted revenues fell one per cent compared to the prior year, as growth in digital real estate and book publishing was more than offset by lower advertising revenues.

The loss for the quarter of US$219 million as compared to a profit of US$106 million the previous year.

Pictured: Most of the Wall Street Journal's 2.1 million paid subscribers are now digital

Sections: Newsmedia industry

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