News Corp shares lower after mixed quarter
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More news: News Corp shares fell on the ASX after the media group said that lower advertising spend had weighed on earnings for the March quarter.
Shares were down 3.5% to $37.25 by 1:40pm AEST.
E&P Capital analysts said New Corp's third quarter revenue (-1%) and EBITDA (-2%) fell short of consensus estimates.
However, they noted it was "effectively an in-line result" as better-than-expected results for the company's subscription video services and digital real estate segments, offset weaker book publishing and news media earnings.
The announcement of New Corp's extended partnership with Google should also be seen as a positive, they said.
News Corp extends partnership with Google
More news: News Corp has extended its existing partnership with Google, which will see the tech company continue to pay for journalism from the media group's global news sites, including the Wall Street Journal, the Times and the Australian.
The announcement was part of the company's third quarter results with CEO Robert Thomson noting the world was in the midst of an exponential digital revolution.
No further details have been revealed of the extended partnership, which began in 2021.
Slashed advertising budgets weigh on News Corp earnings
The news: News Corp reported a downturn in revenue and net income for the March quarter, as lower advertising spend hit the media group's earnings.
The numbers: Third quarter revenues fell 1% year on year to USD2.42 billion ($3.7 billion). The group said the decline was due to negative impact from foreign currency fluctuations, and adjusted revenues were flat compared to the prior year.
News Corp's advertising revenue shrank by 8.9% to USD358 million, while its book publishing segment (-2%) and subscription video services unit (-5%) also dropped year on year.
Net income in Q3 dropped 29% compared to the prior corresponding period, to USD42 million.
Shares were down more than 1% at the close of Wednesday's session in New York.
The context: News Corp said that revenues were driven down by lower advertising revenues at its news media segment, lower physical book sales at its book publishing segment, and lower revenues at its real estate listing company Move due to challenging housing market conditions in the US.
The decrease, however, was partly offset by a 7% rise in its digital real estate services segment, aided by a strong quarter from its Australian real estate advertising company REA Group.
New Corp's CEO Robert Thomson noted that the company is "working to promote our quality journalism in the age of generative AI", having progressed talks with "four or five" generative AI firms during the quarter.
Thomson also said that News Corp has been undergoing "intense and ongoing" work to review the company's structure, including making "underlying changes to provide maximum flexibility".
The source: News Corp media release
