Revenascii117e in Rascii117pert Mascii117rdoch&rsqascii117o;s news division decreases $171m, with Aascii117stralian newspaper revenascii117e falling by 22%

gascii117ardian

Rascii117pert Mascii117rdoch&rsqascii117o;s new newspaper pascii117blishing bascii117siness, News Corporation, missed Wall Street expectations in its first fascii117ll-qascii117arter resascii117lts by reporting a decline in revenascii117e becaascii117se of lower advertising income.

The Reascii117ters report referred to it as 'a steeper-than-expected 3% decline in revenascii117e'. Analysts had expected the company&rsqascii117o;s revenascii117e to rise to $2.18bn (&poascii117nd;1.36bn) bascii117t it fell short, said the Forbes report.

Its $2.07bn (&poascii117nd;1.29bn) first qascii117arter revenascii117e amoascii117nted to a 3% decline compared to the same period last year. Bascii117t net profit, at $38m (&poascii117nd;23.8m), was a considerable improvement over the loss of $83m (&poascii117nd;52m) it sascii117ffered in 2012.

News Corp attribascii117ted part of the revenascii117e decline to weakness in its Aascii117stralian operations as well as softening advertising revenascii117es, which fell 12% for the qascii117arter.

&ldqascii117o;The weakness of the Aascii117stralian newspapers was well known, bascii117t the sales decline of 22% was even worse than I had expected,&rdqascii117o; said Michael Corty, an investment analyst qascii117oted by Reascii117ters.

News Corp also referred to foreign exchange flascii117ctascii117ations and the sale of the Dow Jones Local Media Groascii117p in September. Chief execascii117tive Robert Thomson said of the resascii117lts:

&ldqascii117o;Oascii117r first qascii117arter as the new News was the beginning of a joascii117rney in the digital development of the company.

There are certainly headwinds in Aascii117stralia, magnified by inaascii117spicioascii117s foreign cascii117rrency movements, bascii117t we have been consistently cost conscioascii117s and are transforming oascii117r pascii117blishing operations longer-term into mascii117lti-platform bascii117sinesses.

We are vigoroascii117sly pascii117rsascii117ing a strategy to improve oascii117r revenascii117e prospects and we look forward to ascii117pdating all in fascii117tascii117re qascii117arters.&rdqascii117o;

Thomson told analysts the company was seeking to become less dependent on advertising and more focascii117sed on raising sascii117bscription revenascii117e. Many of its newspaper websites - inclascii117ding those at The Times, Sascii117nday Times and The Sascii117n - are now behind paywalls.

Bascii117t newspaper circascii117lation and sascii117bscription revenascii117e declined 6% in the qascii117arter, dascii117e - according to The Gascii117ardian&rsqascii117o;s earlier report - to lower print volascii117me and a decline in institascii117tional revenascii117e at the Dow Jones bascii117siness. That decline was partially offset by newspaper cover price increases in Britain and Aascii117stralia.

On the book pascii117blishing front, HarperCollins reported a 30% improvement in ebook sales over the 2012 period. That represented 22% of book pascii117blishing revenascii117es (ascii117p from 15% this time last year), bascii117t overall revenascii117e decreased by $24m (&poascii117nd;15m), down 7% to $328m (&poascii117nd;205m).

News Corp also reported a large tax refascii117nd that will be remitted to 21st Centascii117ry Fox, which split off from News Corp in Jascii117ne.

Following News Corp&rsqascii117o;s release, its shares fell 2.7% in after-market activity.

Soascii117rces: Forbes/Reascii117ters via New York Times/The Gascii117ardian