Despite a soft advertising environment, Rupert Murdoch
controlled diversified media conglomerate,
) reported better-than-expected third-quarter fiscal 2014 results
on the back of effective cost management. The publisher of
The Wall Street Journal
New York Post
recorded quarterly earnings of 11 cents a share that surpassed the
Zacks Consensus Estimate of 3 cents but tumbled 15% from 13 cents
delivered in the prior-year quarter. Softness did persisted across
the company's Australian newspaper.
Including one-time items, the company reported quarterly
earnings of 8 cents a share, substantially down from 56 cents in
the year-ago quarter.
News Corporation appointed William Lewis as Chief Executive
Officer of Dow Jones, with immediate effect. Moreover, the company
recently entered into a deal to acquire Harlequin Enterprises
Limited from Torstar Corporation for about $415 million. Harlequin,
which will form part of the Book Publishing segment, is a leading
publisher of women's fiction.
The company, which split from
Twenty-First Century Fox, Inc.
) on Jun 28, 2013, said that total revenue for the quarter came in
at $2,078 million, down 5% from the year-ago quarter but came ahead
of the Zacks Consensus Estimate of $2,063 million.
Total revenue of this Zacks Rank #3 (Hold) stock was adversely
affected by a decline in advertising revenue at the News and
Information Services division, the sale of the Dow Jones Local
Media Group and adverse impact of foreign currency fluctuations.
This was partly offset by the sturdy performance across the Digital
Real Estate Services and Book Publishing divisions.
Total advertising revenue dropped 9% to $952 million, while
circulation and subscription revenue fell 5% to $665 million.
We observe that revenue across the
News and Information Services
segment fell 9% year over year to $1,488 million primarily due to
waning advertising revenue and the sale of the Dow Jones Local
Media Group. Australian newspapers revenue tumbled 21%, while total
segment advertising revenue dipped 10%. Adjusted segment EBITDA
decreased 11% to $146 million.
Cable Network Programming
segment revenue came in at $113 million, down 10% from the year-ago
quarter, while adjusted EBITDA was $31 million, up 24% year over
year. Increase in digital platform subscribers as well as higher
affiliate pricing failed to offset the negative impact of foreign
currency fluctuations that led to revenue decline.
Revenue at the
Digital Real Estate Services
segment soared 19% year over year to $102 million, whereas adjusted
EBITDA surged 49% to $61 million.
segment, which consists of HarperCollins Publishers, reported
revenue of $354 million, up 14% from the prior-year period,
reflecting robust performance of the
series by Veronica Roth. On the other hand, e-book sales surged
46%, contributing 26% of revenue.
Adjusted EBITDA for News Corporation's book publishing business,
which competes with e-book devices sold by
), came in at $53 million, increasing 77% year over year.
segment, which comprises Amplify, a digital education business,
posted revenue of $21 million that plunged 22% from the
previous-year quarter. The divestment of Australian digital
businesses in fiscal 2013 and fall in project-based consulting
revenue impacted the results. Adjusted EBITDA for the segment was a
loss of $83 million compared with a loss of $58 million in the
Other Financial Aspects
News Corporation ended the quarter with cash and cash
equivalents of $3,207 million, amount due from Twenty-First Century
Fox of $91 million, and shareholders' equity of $13,034 million,
excluding non-controlling interest of $134 million.
Capital expenditures for the first nine months of fiscal 2014
were $244 million, while the company generated free cash flow of
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