News Corp Reports Loss on Legal Settlement

News Corp swung to a loss in the March quarter as the company took a $280 million charge related to a legal settlement and turmoil in the advertising markets and foreign-currency fluctuations continued to weigh on the business.

The company—which publishes The Wall Street Journal as well as other newspapers in the U.K., Australia and the U.S.—reported a loss of $149 million, or 26 cents a share, compared with a profit of $23 million, or four cents a share, a year ago. Revenue declined 7% to $1.89 billion from $2.04 billion.

Adjusted earnings per share were four cents. The adjusted earnings exclude, among other items, a settlement charge from payments to resolve a legacy lawsuit and related claims against the News America Marketing division.

Analysts polled by Thomson Reuters had expected total revenue of $1.93 billion in the quarter and adjusted per-share earnings of three cents.

The news and information services segment, which accounts for two-thirds of News Corp's total revenue, reported a 9% decline in sales. Advertising revenue declined 15% in the unit.

"With the advertising market in the midst of upheaval, advertisers and agencies are experimenting with their spend," News Corp Chief Executive Robert Thomson said in prepared remarks. "We believe that premium mastheads and audiences are currently undervalued by agencies, some of which are more focused on fashion than function."

Mr. Thomson said News Corp is well-positioned to capitalize as digital marketers look for high-quality content.

The company said digital revenue now amounted to more than 50% of total revenue at its Dow Jones unit, which includes the Journal, and that digital advertising contributed about a third of all advertising revenue.

Revenue in News Corp's book publishing segment fell 11% to $44 million because of lower revenue from the Divergent series and American Sniper. Operating profit in the segment fell 36%.

Meanwhile, the small-but-growing digital real-estate business reported a 14% jump in revenue.

Write to Lukas I. Alpert at [e-mail]

(END) Dow Jones Newswires

May 05, 2016 17:55 ET (21:55 GMT)

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