News Corp. touts newspaper improvements
News Corp. emphasized improvements in its core newspaper business to Wall Street investors and analysts on Thursday afternoon.
Executives from the global media conglomerate said that advertising was on the upswing within News Corp's Australian newspaper stable, long a blemish on company earnings reports, and at the company's marquee American broadsheet, The Wall Street Journal, which had a strong October thanks to higher print-advertising revenues in the finance and technology categories, they said.
"The advertising headwinds in Australia have dissipated," chief executive Robert Thomson said on a Thursday evening conference call to discuss News Corp's financial results for the first quarter of the 2015 fiscal year. "Advertising at The Wall Street Journal has been robust in recent weeks, with October showing strong gains versus the previous year."
Still, advertising at the Journal was down in the high single digits year-on-year during the three-month period that ended on Sept. 30. Australian ad revenues were down 5 percent year-on-year compared with 16 percent in the fourth quarter of 2014, and ad revenues at the company's U.K. papers, including The Times of London and The Sun, were down 6 percent, about flat with the previous quarter. News Corp.'s publications also include the New York Post, The Sunday Times and The Australian.
Overall revenues in the news and information segment, which also encompasses Dow Jones, decreased 3 percent, or $44 million dollars, with total segment advertising revenues down 7 percent largely due to weakness in print advertising. Thursday's results marked the start of News Corp's second fiscal year since being spun-off into a publishing-focused entity without the cushion of goldmines like Fox News and 20th Century Fox, which now trade separately.
Despite industry-wide growth challenges resulting from the shift to digital platforms, News Corp. has remained bullish on newspapers, a medium to which the company owes its origins with chairman Rupert Murdoch's inheritance of a single Australian tabloid in 1952.
But newspapers aren't what drove News Corp. to 4-percent first-quarter revenue growth, to $2.15 billion, and $65 million in quarterly net income available to shareholders, up from $27 million the previous year.
Thomson touted "considerable strength" at the book publisher HarperCollins and the online real estate company REA Group, where News Corp.'s 62-percent stake boosted digital real estate segment revenues by 24 percent to $112 million. The book publishing unit, where revenues were up 24 percent to $406 million, was bolstered by the acquisition this year of the global romance publisher Harlequin.
Thomson also highlighted other recent acquisitions, such as the social news service Storyful and the online real estate business Move, a deal expected to close by the end of the calendar year. Additionally, News Corp. owns an educational curriculum company and an Australian pay-TV provider.
"We are not just a newspaper publisher," said Thomson.
CORRECTION: An earlier version of this article mistakenly referred to News Corp's acquisition of Storify; the company acquired Storyful.