News Corp plans to cut costs and layoff staff after reporting weaker revenue in the three months to the end of December as interest rates rise and inflation takes hold.
The global media group posted a 7% fall in revenue to $US2.52 billion in the December quarter, down from analyst expectations of $2.55 billion.
The company says the decline was mainly due to a $171 million, or 6%, negative impact from foreign currency fluctuations, lower revenues at book publishing and lower revenues at from digital real estate services due to challenging housing market conditions in Australia and the US.
Net income was $94 million compared to $262 million in the same quarter the year before.
In Australia, revenue fell 13%, impacted by negative foreign currency fluctuations. On a constant currency basis, News Corp Australia saw revenue down 3%.
CEO Robert Thomson said: “The second quarter highlighted the progress made in certain of our business segments.
"Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses. But we believe these challenges are more ephemeral than eternal.
"Just as our company passed the stress-test of the pandemic with record profits, the initiatives now underway, including an expected 5 percent headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth.
"Even in the midst of the obvious global challenges, the professional information business at Dow Jones displayed particular promise, with revenues surging 45 percent year-over-year. That encouraging result highlights the value of our opportunistic acquisitions of OPIS and CMA, and continuing growth at our burgeoning Risk and Compliance business.
At Foxtel, revenue fell 7% to $462 million in the quarter due to a $52 million, or 10%, negative impact from foreign currency fluctuations.
Adjusted revenues of $514 million increased 3%.
Higher revenues from Kayo and BINGE, driven by increases in both volume and pricing, and higher commercial revenues were partially offset by the impact from fewer residential broadcast subscribers and lower advertising revenues.
Foxtel Group streaming subscription revenues represented approximately 26% of total circulation and subscription revenues in the quarter, as compared to 19% in the prior year.
At the end of December, Foxtel’s total closing paid subscribers were more than 4.3 million, a 10% increase, primarily due to the growth in BINGE and Kayo subscribers, partially offset by lower residential broadcast subscribers.
Broadcast subscriber churn in the quarter improved slightly to 12.9% from 13% in the prior year. Broadcast average revenue per user (ARPU) for the quarter increased 2% year-over-year to A$83 (US$55).
The numbers:
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