New York: Rupert Murdoch`s News Corp reported a steeper than expected 3 percent decline in revenue in the company`s first quarter that it was split off from its more profitable sister entertainment business Fox, as a steep drop in Australian newspapers took its toll.
The company, which publishes The Wall Street Journal and the Times of London, said net income attributable to common shareholders was USD 27 million, compared to a loss of USD 92 million in the same quarter last year.
News Corp shares fell 4 percent in after-hours trading on disappointment over the USD 2.07 billion revenue figure, which missed a Thomson Reuters I/B/E/S forecast of USD 2.2 billion.
"The revenue was clearly weaker than expected," said Doug Arthur, an analyst with Evercore Research.
On an adjusted basis, the company earned USD 17 million, or 3 cents a share, missing the consensus forecast of 5 cents.
A steep decline in newspapers in Australia, where press magnate Murdoch was born, weighed particularly heavily on the results.
"The weakness of the Australian newspapers was well known, but the sales decline of 22 percent was even worse than I had expected," said Morningstar analyst Michael Corty.
News Corp separated its publishing business in July from its much more lucrative entertainment assets, including its movie studio cable and TV properties that are now part of 21st Century Fox Inc .
This is the first time that News Corp, which retained the name, is reporting as a standalone company that includes newspapers ranging from The Wall Street Journal, Times of London, and The Australian, book publisher HarperCollins, Australian pay-TV and digital real estate stakes, and a fledgling education unit Amplify.
The split happened as newspapers face unprecedented challenges because advertisers are shunning the medium in favor of splashier digital properties and readers are ditching print subscriptions.
First Published: Tuesday, November 12, 2013, 10:29