News Corp Misses Earnings Estimates at End of First Standalone Year

Media company reports just a penny per share of earnings, missing the mark by a few cents

News Corp

News Corporation just celebrated its first full year as a standalone company, but probably isn’t busting out the champagne, as its earnings fell shy of analysts’ marks.

On Thursday (Aug 7), the media company reported fourth quarter earnings per share of one penny, while estimates anticipated three or four cents a share.

Also read: CBS Earnings Dip Without NCAA Basketball Tournament in Q2 2014

News Corp reported Q4 revenue of $2.19 billion, down three percent from last year — but good enough to slightly top consensus forecasts.

The majority of the revenue decline comes from lower advertising revenues at the News and Information Services segment, the sale of Dow Jones Local Media Group and foreign currency fluctuations, according to the accompanying earnings press release.

That dip was partially offset by strong performances in the Book Publishing and Digital Real Estate Services realms, News Corp said. On a subsequent earnings call, Chief Exec Robert Thompson specifically pointed to sales of HarperCollins “Divergent” novels as a bright spot. “Divergent” came out in film form in March 2014, starring Shailene Woodley and Theo James, boosting book sales.

Also read: 21st Century Fox COO Chase Carey on Murdoch Proposal: ‘Let Me Be Clear – We Are Done’

For the end of the fiscal year, News Corp reported EPS of $0.46 on $8.57 billion in revenue — the latter representing a four percent decrease.

Commenting on the results, Chief Executive Robert Thomson said: “We finished our first full year as the new News Corp and made significant progress in achieving the mission we articulated at the outset — to be more global and more digital through organic growth, product launches and strategic acquisitions. Thanks to the exciting e-evolution of News Corp’s leading global brands, we are enjoying enhanced engagement with our expanding paid audiences, underscoring the growth potential of our diverse portfolio.”

Also read: News Corp Buys Social News Agency Storyful for $25M

He continued, “In addition to acquiring Storyful in December, strengthening our video reach and depth, we completed the Harlequin acquisition last week — which brings an international digital platform to HarperCollins. REA, our digital real estate services company, continues to show impressive top- and bottom-line growth, while importantly, expanding to new markets — most recently in Southeast Asia through an investment in iProperty. While we are operating in a challenging advertising environment, our results highlight the diversification of our portfolio and our cost discipline, leading to improved free cash flow and a firm foundation for sustained growth.”

Also read: 21st Century Fox Tops Q4 Earnings Estimates

News Corp as it now stands split from Rupert Murdoch’s entertainment media company in June 2013. That leg, 21st Century Fox, topped it’s own Q4 earnings estimates on Wednesday (Aug. 6).

Murdoch and company tried and failed to purchase Time Warner this June. The media mogul’s $80 billion offer was rejected by the board, which subsequently removed the ability for shareholders to vote on the sale. Murdoch withdrew his offer earlier this week, and on Wednesday’s earnings call, Fox COO Chase Carey claimed that they would no longer pursue the purchase.

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