News Corp profits fall as advertising revenue declines

Profits at News Corp, the publisher of The Sun and The Times, fell by more than 50 per cent, as advertising revenues continued to decline and the strong dollar took its toll.

However Rupert Murdoch’s publishing company, which was split from his TV and film business almost two years ago, reported that acquisitions offset lost revenue. Net income attributable to shareholders dropped by 52 per cent to $23m (£15.1m) for the quarter to the end of March. Total revenues for the global group slipped 1 per cent to $2.06bn.

Total earnings across the group before interest, tax, depreciation and amortisation fell by 7 per cent to $175m. These figures included a charge of $15m relating to the phone-hacking scandal at the News of the World.

News Corp has bolstered its business in the online housing market sector, by buying a company called Move, which it has integrated with its realtor.com site. The digital real estate services sector’s revenues increased by 67 per cent, making it the fastest growing part of the group.

Robert Thomson, chief executive, said: “News Corp is now a global leader in digital real estate which we believe will underpin long-term expansion and complement our expertise in news and financial analysis.”

The company also has high hopes for the publication of Go Set a Watchman, the sequel to Harper Lee’s To Kill a Mockingbird, which HarperCollins, News Corp’s book publishing division, releases on 14 July.

HarperCollins reported a strong quarter with a 14 per cent increase in revenues and a 6 per cent increase in profits to $56m. The increased revenues also included sales from Harlequin, the world’s biggest romance publisher, which News Corp bought last year.

E-book revenues declined 3 per cent in the quarter, but still represented 22 per cent of sales for consumer titles in the third quarter.

HarperCollins has had a success with American Sniper, the autobiography of the late US Navy Seal Chris Kyle, which was made into a film starring Bradley Cooper.

Newspapers continued to struggle with revenue in News Corp’s news and information division, falling 9 per cent overall, as ad revenue declined 12 per cent, driven down primarily by foreign currency fluctuations, weakness in print advertising and lower revenues at News America Marketing. Circulation and subscription revenue fell 6 per cent.