News Corp posted improved earnings for the March quarter as the global media company pursues digitisation and simplification of its portfolio.
Revenue rose 3% to $US2.34 billion in the March quarter, about $US160 million better than expected by market analysts.
Net income was $US96 million compared to a loss of $US1 billion in the same quarter last year which included non-cash impairment charges of $US1.1 billion
CEO Robert Thomson told analysts: "We have now had three successive quarters of double-digit profit increases, and we strongly believe these rather positive results reflect an increase in our core profitability."
The company says the results were driven by digital real estate services, book publishing, financial publisher Dow Jones and a positive impact from foreign currency fluctuations
This growth was partially offset by lower revenue at the news media segment, driven by a $199 million, or 9%, negative impact from the divestiture of News America Marketing, weakness in print advertising and a $28 million, or 1%, negative impact from the closure or transition to digital of certain regional and community newspapers in Australia.
CEO Robert Thomson says the financial year is on a trajectory to be the most profitable since News' reincarnation in 2013.
"This highlights the transformed character of the company, with improved revenue performance and a 23% increase in profitability in the third quarter," he says.
"The results vindicate the strategy of simplifying the asset mix, vigorously pursuing digitisation, slimming the cost base, and investing in three growth areas — Digital Real Estate Services, Dow Jones and Book Publishing."
Digital revenue represented 30% of the News Media segment compared to 19% in the same three months last year, and represent 28% of the combined revenues of the newspaper mastheads.
In Australia, digital subscribers at News Corp mastheads were 760,000 at the end of March, up from 613,300.
In the UK, The Times and Sunday Times digital subscribers awere 354,000, compared to 345,000. The Sun’s digital offering reached 119 million global monthly unique users compared to 164 million.
The New York Post’s digital network reached 139 million unique users compared to 199 million.
At Dow Jones, digital revenues reached 74% of the total, with digital advertising growing by 30%.
The Wall Street Journal hit a record 3.38 million average subscriptions in the quarter. Digital-only subscriptions grew 29% to 2.63 million average subscription and represented 78% of total Wall Street Journal subscriptions.
Foxtel's total closing paid subscribers were 3.541 million, a 21% increase compared to the March quarter last year, mainly due to the launch of Binge and the growth in sports streaming platform Kayo.
Segment earnings in the quarter increased $23 million, or 34%, primarily driven by $22 million of lower sports programming rights and production costs, reflecting savings from renegotiated sports rights.
"We are genuinely delighted with the progress," Thomson told an analysts briefing.
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