Rupert Murdoch’s News Corp remains confident advertisers will return to its print mastheads, despite a seven per cent slide in the global media giant’s third quarter earnings.
Earnings from its News and Information business slumped 23 per cent to $US113 million ($A142.31 million) during the three months to March 31, though the result was skewed by a lower Australian dollar and other currency fluctuations.
Advertising revenue from News Corp’s Australian titles fell four per cent, excluding the impact of currency movements, despite an increase in digital advertising sales.
But chief executive Robert Thomson is adamant advertisers will eventually see the value of the company’s mastheads, which include The Australian and the Herald Sun, as well as The Sun in the UK and the Wall Street Journal in the US, and their associated websites.
“If you look at where large companies are spending at least some of their money, there are too many meaningless (advertisement) placements on frivolous sites,” he told analysts from New York on Wednesday.
“In the end we’re very confident about our mastheads … about the power of print and that in the end advertisers will return to quality.”
The company’s main Australian rival, Fairfax, also revealed on Wednesday that revenues from its metro newspapers, including the Sydney Morning Herald and The Age, were down seven per cent since the start of 2015.
But Fairfax managed to lift total revenues one per cent, thanks to the strength of its Domain property advertising business, where revenue jumped 54 per cent.
Its publishing revenues for its stable of metropolitan newspaper titles, which include The Age, were down seven per cent.
News Corp recorded total underlying earnings of $US163 million ($A205.28 million) during the March quarter, down from $US175 million ($A220.39 million) a year ago.
Total revenue fell one per cent to $US2.06 billion ($A2.59 billion).
Citi Analyst Justin Diddams said the result was worse than the market’s consensus estimates, which was for earnings of $US185 million and revenue of $US2.13 billon.
He said the performance of Foxtel and REA group, which have been News Corp’s strongest Australian businesses in recent years, had been weaker than expected.
“We appreciate there’s one-off impacts on both businesses, slower listings volume at REA and investment in subscriber growth at Foxtel, but these negative drags exceeded our forecasts,” he said.
Foxtel, which News owns in a partnership with Telstra, suffered a 27 per cent slide in US-reported earnings due to higher programming and marketing costs linked to the rollout of its Presto streaming venture, and the lower Australian dollar.
Meanwhile, realestate.com.au owner REA lifted underlying revenue by nine per cent, which is well below the 22 per cent rise Citi had forecast, due to slower than expected listings.
News Corp shares were closed 79 cents, or 3.91 per cent, lower at $19.41.