News Corp Profit Misses Estimate As Advertising Slumps

(RTTNews) - News Corp (NWS, NWSA) Thursday reported a weaker-than-expected fourth-quarter profit, hurt by lower advertisement and circulation revenue. Nevertheless, its book publishing and other segments fared well, aiding revenues to surpass Wall Street estimates.

With the results, News Corp completes a full year as a separate company after Chairman Rupert Murdoch spun off its entertainment and TV assets into Twenty-First Century Fox (FOX, FOXA).

News Corp shares initially gained about 2 percent in after-hours trade on the Nasdaq, but later surrendered the gains.

"While we are operating in a challenging advertising environment, our results highlight the diversification of our portfolio and our cost discipline," said News Corp CEO Robert Thomson.

Under Thomson, News Corp is striving to boost its digital publishing business and expand globally, with the traditional print business under pressure for some time as advertisers shift to the digital space.

Toward that end, News Corp recent closed its C$455 million acquisition of Harlequin Enterprises, boosting the global platform and digital presence of its book publishing unit HarperCollins Publishers.

News Corp, which owns the Wall Street Journal and the New York Post, reported fourth-quarter net earnings to stockholders of $12 million or $0.02 per share. This compares with a loss of $1.12 billion or $1.94 per share last year, when it recorded hefty impairment charges.

Excluding items, adjusted earnings for the quarter were $6 million or $0.01 per share, compared with $69 million or $0.12 per share a year ago.

On average, 10 analysts polled by Thomson Reuters projected earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter slid 3 percent to $2.19 billion from $2.26 billion in the prior year. Nine analysts had a consensus revenue estimate of $2.17 billion for the quarter.

Revenue at the company's News and Information Services segment slid 6 percent to $1.56 billion year-over-year, as advertisement and circulation streams softened. The segment was also hurt by higher expenses at News UK.

At smaller businesses, Cable Network Programming, revenue fell 7 percent, while Digital Real Estate Services gained 24 percent. Book Publishing revenue was up 10 percent, partly on the strength of e-books.

The recent quarter was partly hurt by foreign currency losses, News Corp said.

In June 2013, Rupert Murdoch split News Corp into two public companies after concerns from shareholders over scandals and to unlock greater shareholder value.

Murdoch went on to become the CEO of the more profitable media and entertainment business, 21st Century Fox Inc (FOXA).

Fox recently withdrew its unsolicited bid to acquire smaller rival Time Warner Inc. On Wednesday, it reported better-than-expected earnings on the strength of its cable network and entertainment businesses.

News Corp stock closed Thursday at $17.43, down $0.20 or 1.13%, on a volume of 6.3 million shares on the Nasdaq. In the past year, the stock has trended in the range of $15.44 - $18.53.