Profits signal News revival

NEWS Corp chief Robert Thomson has sounded a defiant note for the company, with every segment posting gains, and growth in digital subscriptions pushing profits higher.

Shares in News Corp surged 4.6 per cent to close at $19.70 yesterday as Mr Thomson laid out growth plans for the group ahead of a proposed merger of the company’s pay-TV businesses.

Pending regulatory approval, News is combining Foxtel and Fox Sports, with News Corp controlling 65 per cent of the new company and Telstra owning the rest.

The new company was expected to make a “substantial contribution” to revenue and earnings before interest, tax, depreciation and amortisation at News Corp, Mr Thomson said.

First-quarter revenue beat analysts’ expectations, climbing 5 per cent amid gains in the digital real-estate business and growing digital sales in the newspaper unit, which helped offset falls in print advertising.

The company — which publishes the Mercury and other newspapers in Australia, the UK and the US — reported total revenue of $US2.06 billion ($2.7 billion) for the three months to September, compared with $US1.97 billion in the same period a year earlier.

Its EBITDA improved 92 per cent to $249 million, up from $US130 million, partly boosted by a one-time $US46 million tax benefit in Britain. Net income for the quarter was $US87 million.

Growth was also boosted by the acquisitions of Australian Regional Media, UK talkback radio group Wireless and a $US26 million positive impact from currency fluctuations.

The digital real-estate business, including contributions from REA Group and US listings business Move, reported a 20 per cent gain in revenue to $US271 million.

The company’s news and information-services business, which accounts for about twothirds of News Corp’s top line, reported a 2 per cent — or $US19 million — increase in revenue.

Digital subscriptions were up at a string of mastheads. At the Dow Jones unit, publisher of the WSJ, digital accounted for 60 per cent of revenues — a record proportion.

News Corp Australia’s newspapers maintained their digital growth momentum with subscriptions up 30 per cent from a year ago.