News Corp profit beats on digital real estate unit strength
(Reuters) - Wall Street Journal owner News Corp (>> News Corp) reported a better-than-expected quarterly profit on Thursday, driven by a tight control on expenses and growth in revenue across all its businesses.
News Corp said revenue in its rapidly growing digital real-estate unit, which includes REA Group Ltd (>> REA Group Limited), rose nearly 20 percent to $271 million.
Increased competition from digital media and a declining readership is driving print advertising down. Spending on print advertising in the U.S. is expected to fall 14 percent this year to about $18 billion, a third of what it was 10 years ago, according to media research firm Magna Intelligence. (http://bit.ly/2zJsXdP)
Major publishers have not been immune to eroding print ad sales. New York Times Co (>> New York Times Co) reported a 20.1 percent decline in print ad revenue in the latest quarter, while Chicago Tribune Media owner Tronc Inc (>> tronc Inc) posted an 18 percent fall.
News Corp, controlled by media mogul Rupert Murdoch, has been implementing various cost-cutting measures like reducing staff in its Dow Jones division, which includes the Journal, while boosting its digital real estate business to improve margins.
Operating expenses fell to $1.14 billion from $1.16 billion.
Revenue in the company's news and information division, which accounts for about two-thirds of total revenue, rose 1.6 percent to $1.24 billion in its first quarter.
Net income available to shareholders was $68 million, or 12 cents per share, in the first quarter ended Sept. 30, compared with a loss of $15 million, or 3 cents per share, a year earlier.
On an adjusted basis, the company earned 7 cents per share, beating the average analysts' estimate of a profit of 1 cent, according to Thomson Reuters I/B/E/S.
Total revenue rose 4.5 percent to $2.06 billion, beating analysts' estimate of $1.98 billion.
Thomson Reuters <TRI.N> (>> Thomson Reuters Corp) the parent of Reuters News, competes with Dow Jones Newswires.
(Reporting by Pushkala Aripaka and Divya Grover in Bengaluru; Editing by Shounak Dasgupta)