News CorporationNWSA , a provider of media and information services, has divested its Amplify Insight and Learning businesses to a management team backed by a group of private investors. Financial terms of the deal were not disclosed.
The digital education business segment will be classified as discontinued operations, for reporting purposes, starting from the first quarter of fiscal 2016. Founded in 2011, Amplify, a leading supplier of educational analytics and assessments has served more than 200,000 educators and 3 million students across 50 states.
We note that while reporting its fourth-quarter fiscal 2015 results on Aug 12, News Corp. had informed that it would no longer market Amplify's Access products to new customers. However, it will provide services to existing customers.
Reportedly, in compliance with this disinvestment, News Corp. fired about 500 of the 900 employees working at the Amplify business segment. The company said that it had to take this step in order to better focus on its resources.
News Corp. decided to sell Amplify as the business has been losing money. Though the company had posted better-than-expected bottom-line results for the fourth quarter of fiscal 2015, wherein adjusted earnings of 7 cents a share beat the Zacks Consensus Estimate by a penny and increased substantially from 1 cent earned in the year-ago quarter, it had succumbed to a loss on reported basis.
Including impairment charges (amounting to $371 million) related to the Amplify business, this publisher of The Wall Street Journal and New York Post, reported fourth-quarter loss of 65 cents a share, marking a sharp decline from 2 cents earned in the year-ago period. As a result, News Corp. started looking for strategic alternatives for its Amplify digital education businesses.
News Corp. currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the related industry include Entercom Communications Corp. ETM , Gray Television, Inc. GTN and Nexstar Broadcasting Group, Inc. NXST . All three stocks carry a Zacks Rank #2 (Buy).
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