There was nowhere to hide for the Murdochs’ News Corp in the three months to September 30.
Every part of the business saw double digit falls in earnings as a perfect storm of negatives hit the company hard, including, as CEO Robert Thomson described it, “a sluggish Australian economy” and “harsh economic conditions”.
It was not a quarter to boast about, with some of the only positives being a rise in digital subscriptions for Dow Jones and for the Foxtel streaming service Kayo.
There were plenty of negatives to highlight (not that News will): more write-downs (US$273 million, or $A395 million), this time in the value of its News America marketing business; the weak Australian economy and real estate; weak earnings in books; more financial problems at Foxtel; and a loss of broadcast subscribers. Plus, currency headwinds are are now a constant for the company thanks to the strong US dollar.
The end result for the quarter was a loss of US$211 million (A$305 million) against a profit of US$128 million (A$185 million) in the same quarter of 2018.
That’s a swing of US$339 million — close to half a billion dollars, a big ouch by any measure.
Revenues fell 7% to $2.34 billion. Even by News’ own unique non-standard measure of “Total Segment EBITDA” (earnings before interest, tax, depreciation and amortisation) it was a rotten quarter, with every segment reporting double-digit falls in earnings to the point where the total plunged 38% to US$221 million from the Steptember 2018 quarter’s US$358 million.
News and information services (including the Australian, US and UK papers) saw a 49% slump in Total Segment EBITDA to US$49 million from US$109 million. Digital subscription services (Foxtel/Fox Sports/Sky News) saw a fall of 28% to US$81 million from US$113 million.
Book publishing (Harper Collins mostly) saw its contribution drop 28% to US$49 million, while digital real estate — the main growth business — in Australia and the US saw a 22% slide to US$82 million from US$105 million.
Revenues at News Corp Australia fell 11% in the quarter as revenues at Foxtel also fell US$53 million, or 9%.
News America is on the market and Thomson said there could be a possible buyer, deciding to put its Unruly/Adtek business under review for possible sale.
Thompson made it clear other businesses could be reviewed for sale as News continues what he called “its simplification process”.
In a pretty bleak world, here’s a good news story to put a smile on the face.
When a business only caters for 1% of the consumer base then its doomes to failure, if a publican only spouts one side of politics or one type of religion he loses the other side of his customer base and the same with religion and soon goes broke, there`s a saying in the pub trade, to be a successful publican you must be a wrestler , boxer, mediator, sympathiser, religious and agnosti,c and support all sides of politics , Murdoch and his minions have alieniated over 50% of their consumer base and the only way is up for them is Murdochs death and James to take the reigns as Lachlan is ever more rabid right than his evil old man, personally I cant wait to see Bolt, Jones,Hadley and the rest of the News lackes on the street with begging bowls, they`ll be no jobs for them as they`ll be tainted with Murdochs poison forever.
Maybe it’s the sluggish economy, or maybe they just don’t offer a product that’s worth the price they charge… even when they give it away for free on planes.
It’s only a small point but the $339M mentioned in the sixth para is a lot closer to a quarter of a billion than it is to half a billion
News Corp CEO Robert Thomson mentioned ‘a sluggish Australian economy.’
Suddenly there’s a 180 degree turnabout from the pre-May election gushing by Murdoch’s gang about the Coalition’s masterly economic management. How refreshing to – at long last – hear fact-based commentary from News Corp…& from the top echelon no less.
Six years of the Coalition has engineered our ‘sluggish Australian economy’, let’s give credit where it’s due.