News Corp. profit tops estimates even as ad revenue falls

New York: News Corp., the newspaper publisher that owns The Wall Street Journal and the New York Post, beat profit estimates and posted gains in real-estate services and book publishing, even as advertising sales continued to fall.

Excluding some one-time items, second-quarter profit was 31 cents a share, surpassing the 19 cents predicted by analysts, according to data compiled by Bloomberg. Sales fell to $2.24 billion in the period, which ended 31 December, the New York-based company said. Analysts estimated $2.23 billion.

Like many publishers, chief executive officer (CEO) Robert Thomson is working to transform the company’s newspapers into a digital business. The challenge is online audiences don’t command the same advertising rates as print readers. To improve its results, the company has tried to keep a lid on expenses and is seeking online acquisitions, such as its purchase of digital-news start-up Storyful last year.

“The earnings report demonstrates a measure of progress as we navigate a challenging advertising market,” Thomson said in a statement. “We are continuing to be disciplined on costs, while making opportunistic investments that will extend our revenue reach.”

News Corp. shares climbed as much as 5.2% in late trading on Thursday after the earnings report was released. The stock had declined 11% this year.

Dow Jones

News Corp. faces a management transition after pushing out Lex Fenwick, the head of its Dow Jones and Co. unit. He left the company after slow adoption of DJX—a new higher-priced service aimed at professional and corporate customers.

“There’s no doubt the original concept of DJX had a lot of merit, but to be quite frank the execution was not quite right,” Thomson said on a conference call with analysts following the report.

Chairman Rupert Murdoch broke off News Corp. from 21st Century Fox Inc. at the end of June, creating a new business focused mostly on publishing. In addition to owning newspapers, News Corp. held on to an Australian TV business, which includes a 50% stake in pay-TV company Foxtel. It also owns education start-up Amplify and a controlling stake in REA Group, an online real estate firm in Australia.

News-publishing revenue, which declined 9% last quarter, still accounts for more than 70% of the company’s total sales. Digital real-estate services were the fastest-growing major division, with sales climbing 18% to $103 million. Book-publishing revenue increased 4% to $391 million.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and services.BLOOMBERG