Profits up but News hit by ‘Aussie ‘headwinds”Rupert Murdoch News Corp revenues slump 3% to $2.07 billion for fiscal 2014 first quarter, as ad revenues drop.
The decline was blamed on lower ad revenues for its Aussie publications, foreign exchange fluctuations and the sale of the Dow Jones Local Media Group.
News Corp earnings from Foxtel for three months to September 30 fell to $13m – half of same time a year ago, reflecting the higher contribution to the Pay TV giant due to increasing its ownership stake to 50%, and sale of its 44% stake in SKY Network TV in March.
However, it wasn’t all bad news.
Net profits soared to $38 million compared to a net loss of $83m, the prior year.
“There are certainly headwinds in Australia, magnified by inauspicious foreign currency movements, but we have been consistently cost conscious and are transforming our publishing operations longer-term into multi-platform businesses,” News Corp CEO Robert Thomson said.
Total Segment Earnings before tax rose 58% to $141 million, attributed to full ownership of FOX SPORTS Australia and lower costs at News and Information Services, including lower claims arising out of the phone hacking scandal at News’ UK papers, The News of the World and The Sun.
The hacking scandal, which News called “certain conduct” in a statement to investors, is currently before the courts in the UK with senior editors of both publications on trial.
“Our first quarter as the new News was the beginning of a journey in the digital development of the company,” Thomson said.