August 7, 2014 Last Updated 3:56 pm

News Corp reports earnings for first full year as separate publishing company

For full year, revenue falls 3.6 percent, income falls 53 percent

Press Release:

NEW YORK, NY – August 7, 2014 — News Corporation today reported financial results for the three months and fiscal year ended June 30, 2014.

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.

“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.”

FULL YEAR RESULTS

The Company reported fiscal 2014 full year total revenues of $8.57 billion, a 4% decrease as compared to the prior year revenues of $8.89 billion. The majority of the revenue decline reflects lower advertising revenues at the News and Information Services segment, foreign currency fluctuations and the sale of the Dow Jones Local Media Group (“LMG”), partially offset by the inclusion of FOX SPORTS Australia, which News Corp began consolidating in November 2012 following the Consolidated Media Holdings (“CMH”) acquisition, and strong performance in the Book Publishing and Digital Real Estate Services segments. Adjusted revenues (as defined in Note 1) were 1% lower than the prior year.

The Company reported full year Total Segment EBITDA of $770 million, a 12% increase as compared to $688 million in the prior year. These results include $72 million in fees and costs in fiscal 2014 and $183 million in fiscal 2013 – net of indemnification – related to the U.K. Newspaper Matters (as defined below). The improvement was also driven by the consolidation of FOX SPORTS Australia and the strong performance in the Book Publishing and Digital Real Estate Services segments, offset by adverse foreign currency fluctuations, declines at the News and Information Services segment and higher investment at Amplify compared to the prior year. Adjusted Total Segment EBITDA (as defined in Note 1) decreased 2% compared to the prior year.

Net income available to News Corporation stockholders was $237 million as compared to $506 million in the prior year, which included a non-taxable gain on the CMH and SKY Network Television Ltd. transactions within Other, net as well as impairment charges. Impairment and restructuring charges were $94 million and $1,737 million in the fiscal years ended June 30, 2014 and 2013, respectively. Adjusted net income available to News Corporation stockholders (as defined in Note 3) was $268 million compared to $357 million in the prior year.

Net income per share available to News Corporation stockholders was $0.41 as compared to $0.87 in the prior year. Adjusted EPS (as defined in Note 3) were $0.46 compared to $0.62 in the prior year.

Free cash flow available to News Corporation improved by $293 million in the fiscal year ended June 30, 2014 to $365 million, from $72 million in the prior year.

FOURTH QUARTER RESULTS

The Company reported fiscal 2014 fourth quarter total revenues of $2.19 billion, a 3% decrease as compared to the prior year fourth quarter revenues of $2.26 billion. The majority of the revenue decline reflects lower advertising revenues at the News and Information Services segment, the sale of LMG and foreign currency fluctuations, partially offset by strong performance in the Book Publishing and Digital Real Estate Services segments. Adjusted revenues were 1% lower than the corresponding prior year period.

The Company’s fourth quarter Total Segment EBITDA of $127 million, which includes the fees and costs, net of indemnification, related to the U.K. Newspaper Matters of $16 million, was a 2% decrease as compared to $130 million in the prior year. This decline was primarily driven by weakness at the News and Information Services segment and adverse foreign currency fluctuations, partially offset by the strong performance in the Book Publishing and Digital Real Estate Services segments and lower costs in the Other segment. Adjusted Total Segment EBITDA decreased 7% compared to the prior year.

Net income available to News Corporation stockholders was $12 million as compared to a loss of $1,124 million in the prior year. Impairment and restructuring charges were $21 million and $1,506 million in the three months ended June 30, 2014 and 2013, respectively. Adjusted net income available to News Corporation stockholders was $6 million compared to $69 million in the prior year.

Net income per share available to News Corporation stockholders was $0.02 as compared to a net loss per share of ($1.94) in the prior year. Adjusted EPS were $0.01 compared to $0.12 in the prior year.

NewsCorp-earnings

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