Not surprisingly News Corp glossed over poor results from its newspapers.
In fact, the detail was so scant as to be meaningless in News Corp’s March quarter report, issued this morning.
“Publishing reported third quarter segment operating income of $36 million, a $207 million decrease compared with the $243 million reported a year ago, reflecting the current year’s $125 million litigation settlement charge at the Integrated Marketing Services business.
“Excluding this charge, segment operating income decreased $82 million from last year’s third quarter driven by advertising revenue declines at the Australian and UK newspapers, the inclusion of costs related to the launch of The Daily and lower contributions from the Integrated Marketing Services business. Also contributing to the decline is the absence of earnings contributions from the Dow Jones Index business due to its disposition in March 2010.”
They must either be poor. But then News Corp has cut the amount of disclosure it makes about the performance of the papers in the past year or so.
If Fairfax or another company released such sparse details about a still-important (though fading) business, News Corp’s hacks would have been all over the story, insisting that more detail be made available, like they were after Fairfax’s cuts and profit downgrade was made public on Monday.
The publishing business reported net profit of $US36 million, down from $US243 million, due to that $US125 million litigation settlement cost.
News said that excluding the settlement charge, operating profit fell $US82 million due to advertising revenue declines at Australian and UK newspapers, the inclusion of costs related to the launch of The Daily and lower contributions from the integrated marketing services business. There was no breakdown of where the profit was earned from.
The Daily, a newspaper available only on the iPad, had a loss of $US10 million, but it’s only three months old and the losses were more start-up costs.
You can bet that they won’t be asking News Ltd executives in Sydney for more detail today, but you’d like to hope they would.
Excluding that $US125 million charge (it’s a similar settlement to the Valassis scandal, which cost the company $US500 million in the December, 2009 quarter) News Corp earned $US1.06 billion, down from the Avatar boosted $US1.25 billion in the March quarter of 2010.
Including the $125 million write-off, the company reported third quarter net income of $US639 million compared with $US839 million in the third quarter a year ago.
News Corp’s US cable businesses, plus TV again saved Murdoch and the company as the Avatar boom faded.
Filmed-entertainment sales slid 36% to $US1.55 billion as the quarter’s movies didn’t match Avatar’s success a year ago. Earnings at the filmed-entertainment unit fell by half to $US248 million. That was a major reason why group revenues fell 5.9% in the quarter to $US8.26 billion.
Operating profit for the television unit more than quadrupled to $US192 million on higher revenue from National Football League games and national advertising. (And the Super Bowl in February, which is a one off boost).
Cable networks increased operating income 13% to $US2.04 billion. That’s 60% of News Corp’s top-line profit. At the US channels, advertising was up 14%. News Corp’s Fox TV has also been pushing distributors to pay retransmission fees for its programming, following the drop in ad sales during the US recession.
The group that includes the social network MySpace had an operating loss of $US165 million in the quarter, compared with a $US150 million loss a year earlier. News Corp has started a process to decide what to do with MySpace after it lost market share to Facebook Inc. At this rate they will have to pay someone to cart the body away.