Romance books have given an earnings boost to Rupert Murdoch’s News Corp, but problems at its US digital education business have weighed on the media giant’s bottom line.
The media giant, which bought the world’s biggest romance book publisher Harlequin in 2014, increased by earnings 11 per cent to $US852 million ($A1.15 billion) in the year to June 30.
Group revenues rose by just one per cent to $US8.63 billion ($A11.82 billion) as the company’s newspaper division suffered more advertising slides.
However a $US371 million writedown on News Corp’s troubled digital education business Amplify dragged the media giant into the red with a $US149 million net loss.
The loss compared to a net profit of $US237 million for 2013/14.
News Corp’s stable of newspapers, which include The Advertiser, The Australian, The Times in Britain, and The New York Post, suffered a seven per cent slide in revenues to $US5.7 billion, while earnings dropped nine per cent to $US603 million.
However its book publishing business, which also includes HarperCollins, lifted earnings 12 per cent to $US221 million and revenue by 16 per cent to $US1.667 billion.
Chief executive Robert Thomson said News Corp was able to post stable revenues and robust earnings growth despite an uneven global economy, tough currency headwinds and the ongoing transformation of the media industry.
“The year ahead will be an opportunity to build on the sound and profitable platform we have collectively created,” he said in a statement on Thursday.
A 10 per cent slide in advertising revenues pushed News Corp’s newspaper revenues and earnings down for the year, driven by weakness in print ads and adverse currency movements.
But the company’s decision to acquire Harlequin in early 2014 appears to have paid off, with solid earnings and revenue growth offsetting the slides within the newspaper division.
News Corp said Harlequin and strong backlist sales, resulting from the success of American Sniper by Chris Kyle, had offset lower revenues from Veronica Roth’s Divergent series.
The media’ giant’s acquisition of US online real estate group Move Inc in 2014 also helped lift revenues by 53 per cent at its digital real estate division, which also includes realestate.com owner REA Group.
However earnings fell six per cent.
Foxtel, which News owns in a partnership with Telstra, saw revenues fall by eight per cent to $US239 million and earnings drop by 16 per cent to $US143 million.
News Corp said the pay TV outfit had been affected by currency fluctuations, with the Australian dollar having fallen against the US dollar.
In local currency terms, a nine per cent rise in subscribers to 2.8 million helped limit Foxtel’s revenue fall to one per cent.
Its earnings fell eight per cent mainly due to short-term impacts related to price cuts to subscriber packages, and investment in streaming service Presto.
Meanwhile, Fairfax Media has reported a 62.9 per cent drop in full year profit to $83.2 million after revenue decreased by 5.3 per cent.
But underlying profit rose 0.3 per cent to $1.841 billion for the 12 months to June 28 driven by a 45 per cent increase in revenue from its Domain real estate advertising service.
Chief executive officer and managing director Greg Hywood says digital revenue now fully offseting the decline from print.
Final dividend was flat at two cents per share, half franked.
– AAP
