News Corp earnings slip in March quarter
News Corp's third-quarter earnings declined two per cent to $US242 million ($A374 million) led by a drop in print advertising revenue and Foxtel subscribers.
The company posted a net loss for the March quarter of $US1 billion, after taking a $US1.1 billion ($A1.7 billion) non-cash impairment charge against its Foxtel and News America Marketing assets.
The media giant reported total revenue of $US2.27 billion, an 8 per cent decline from a year ago due to lower print-related advertising revenues and foreign currency fluctuations.
The Rupert Murdoch-controlled company said the COVID-19 pandemic will have a negative impact on its results in the June quarter and all of its businesses will embark on cost-cutting programs.
"We are operating in a different, difficult time," Chief Executive Robert Thomson said.
"Clearly the pandemic will have an impact on our results in the fourth quarter, but all of our businesses are embarking on cost-cutting programs."
Senior executives will take a pay cut with Mr Murdoch voluntarily forgoing his entire cash bonus for the current fiscal year, and Mr Thomson himself to forgo 75 per cent of his annual cash bonus.
News Corp said Foxtel's Kayo live sports streaming service was showing strong growth, with 408,000 paying subscribers as of March 31, compared to 148,000 paying subscribers in the prior year.
Since then, however, subscriber numbers have dipped to 272,000 paying subscribers as of May 2, reflecting the cancellation of live sports during the pandemic.
The company completed its sale of News America Marketing to private equity firm Charlesbank Capital Partners on Tuesday, receiving $US235 million ($A360 million).
The marketing company had been established to distribute coupons via newspaper inserts but had become surplus to requirements with News Corp's shift to digital.
The company said that the Wall Street Journal reached a record 3 million subscribers in the last week, 2.2 million of which are digital-only.
It had 613,000 digital subscribers at its Australian mastheads as of March 31, compared to 493,200 in the prior year.
News Corp was continuing a strategic review of its Australian newspaper business, "focusing on our larger brands and our digital reach", Mr Thomson said.
"Trends at News Australia have remained very challenging, with advertising revenue down 20 per cent on a reported basis and 30 per cent down in local currency," chief financial officer Susan Panuccio told analysts on a conference call.
News Corp Australia suspended printing 60 community newspapers across the country on April 9 because of the virus crisis and is reviewing its regional newspaper businesses.
"You can tell from the tenor of our comments about Australia that there is obviously a strategic review of our print holdings well underway," Mr Thomson told analysts.
"So our simplification process is far from finished."
Mr Thomson said executives were keen to further slim down the business to highlight the value of its Dow Jones unit, including the Wall Street Journal, which he said was performing better than the New York Times.
NEWS CORP POSTS Q3 LOSS
* $US1.0b net loss vs $US23m profit yr ago
* Revenue down 8pct to $US2.27b
* EBITDA down 2pct to $US242m
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