News Corp fourth-quarter sales down 3 per cent

News Corp's fourth-quarter sales fell 3% to $2.19 billion. The company said both advertising and subscription revenues fell during the quarter. News Corp was split into two companies in 2013, with 21st Century Fox owning the media and entertainment division and the new News Corp becoming the publishing business.

News Corp, like many major publishers, is struggling with the transition from print to digital.

In the fourth financial quarter (ending 30 June 2014), the drop in profits in the news and information segment was greater than the increase in revenues from the Australian digital property and book publishing division. Also a more detailed information portal with the latest news can be found at

The company added that lower newspaper circulation in Australia and the UK was partly offset by higher cover prices.

Small profit after big loss last year

The company posted a profit of $12 million (2 cents per share) in the fourth quarter (ending 30 June), compared with a loss of $1.12 billion in the fourth quarter of 2013 due to large impairment and restructuring charges.

EBITDA (earnings before interest, taxes, depreciation and amortisation) fell 2% to $127 million, partly reflecting lower expenses related to the company's phone hacking scandal in the UK. Legal and other expenses related to the scandal were $39 million a year ago, down from $16 million in the quarter ended 30 June 2014.
Print advertising declines
News Corp's news and information segment continued to show a sharp decline in advertising revenue, especially print advertising.

Revenue in the news and information segment, which includes newspapers, fell by 6%, while advertising and circulation revenue fell by 9% and 4% respectively. EBITDA fell 38% to $131m, partly due to higher marketing and relocation costs (both in the UK).


Its publishing wing continued to show strong earnings. EBITDA jumped 50% to $33m thanks to a 10% increase in revenue. Book sales were driven by Veronica Roth's Divergent series.

E-books brought in 22% of consumer revenue in the fourth quarter, up from 19% in the fourth quarter last year.
On 1 August, News Corp completed its acquisition of novel publisher Harlequin Enterprises. The takeover was motivated in part by the company's desire to enter overseas markets.

CEO Robert Thomson said of the results:

"We have completed our first full year as the new News Corp and have made significant progress in achieving the mission we set out at the outset - to become more global and more digital through organic growth, new product launches and strategic acquisitions. Through the exciting electronic evolution of News Corp's leading global brands, we are enjoying increased engagement with our expanding paying audience, highlighting the growth potential of our diverse portfolio."

"In addition to our acquisition of Storyful in December, which strengthened our video reach and depth, we completed our acquisition of Harlequin last week, giving HarperCollins an international digital platform. REA, our digital real estate services company, continues to show impressive revenue and profit growth and importantly is entering new markets - most recently in South East Asia through our investment in iProperty. Although we operate in a challenging advertising environment, our results highlight the diversification of our portfolio and our cost discipline, resulting in increased free cash flow and a solid foundation for sustainable growth."

News Corp is based in New York . It employs 27,000 people.

21st Century Fox has withdrawn its attempt to acquire Time Warner
Following an attempt to acquire pay-TV giant Time Warner, Rupert Murdoch announced earlier this month that 21st Century Fox (Fox) was withdrawing and would no longer pursue a takeover.

Describing his desired merger as a "unique opportunity to bring together two great companies", Mr Murdoch said that despite the friendly approach, Time Warner management "refused to work with us to explore an offer that was very attractive".

Fox made an $80 billion offer to Time Warner, but it was rejected.

Mr Murdoch said his company also withdrew because Fox's share price fell sharply during the acquisition attempt, contributing to his decision to exit.

According to Fox, its board of directors has authorised a $6 billion share buyback programme for the next twelve months.
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