News Corp profits sink amid declines in print

News Corporation posted a US$1.6 billion loss in the three months to June after an impairment charge relating to publishing restructures, while the company was hit by ongoing advertising declines in its Australian print business.

Whilen the company saw a loss in the final quarter of the financial year, for the entire year News posted a US$1.18 billion profit. This figure was significantly down on the previous year's US$2.74 billion.

The loss in the final quarter was driven by a US$2.9 billion writedown as a result of restructuring in the company's publishing division. The Australian arm News Limited is currently undergoing major restructures, while News Corp has also revealed it will be splitting its publishing arm off as a separate company.

News Corp's publishing arm, which includes its Australian-based News Limited mastheads including The Australian and The Telegraph, brought in US$597 million, down US$267 million from US$864 the previous year.

The company said the 31% loss is due to “advertising declines at the Australian newspapers ... and UK newspapers ... [and] the absence of contributions from the closure of The News of World”, although it also claimed The Wall Street Journal had seen a profit increase.

The media giant's various properties – including cable television, cinema and publishing – brought in a combined total of US$5.38 billion in operating income, up from US$4.85 billion last year.

These figures exclude two litigation payments made in the last financial year by News Corp, including US$224 million paid toward investigations relating to the phone hacking scandal. There was also a US$125 million payment related to a litigation settlement.

Annual revenue went up by 1% to US$33.7 billion, up by US$301 million from $33.4 billion last year. News Corp stated much of its revenue was owed to strong performances by its Cable Network Programming and Filmed Entertainment segments, which saw earnings increase by 19% and 22% respectively.

A net income of US$1.4 billion was reported for the year.

Murdoch said: “News Corporation is in a strong operational, strategic and financial position, which should only be enhanced by the proposed separation of the media and entertainment and publishing businesses.”

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