(Updates with CEO’s comment in fifth paragraph.)
Aug. 8 (Bloomberg) -- News Corp., completing its first full year as a stand-alone company, reported quarterly earnings that missed analysts’ estimates for the first time as it struggled in its transition from print to digital.
Profit, excluding some items, was 1 cent a share in the fiscal fourth quarter, compared with the 3 cents analysts estimated on average, according to data compiled by Bloomberg. Revenue fell 3.1 percent to $2.19 billion, said the company, which split from billionaire Rupert Murdoch’s entertainment business last year. Analysts projected $2.14 billion.
Like many publishers, Chief Executive Officer Robert Thomson is working to transform the company’s print properties into a digital business as well as expand around the globe. The company, which owns HarperCollins, finalized its purchase of romance publisher Harlequin Enterprises this month as part of its strategy to reap sales from foreign markets.
The news division, which publishes the Wall Street Journal and the New York Post in the U.S., continued to face difficulty at a time when advertising is fleeing print in favor of digital destinations. Sales in the division fell 6.3 percent to $1.56 billion as advertising revenue weakened.
“The ability to make confident forecasts is undermined by the erratic patterns that have characterized trading, particularly in print, which is seriously undervalued as a platform by advertisers,” Chief Executive Officer Robert Thomson said yesterday on a conference call. “Print is a concentrated, intense reading experience with unique affinity in our digitally distracted age.”
Shares of News Corp. fell 2.1 percent to $17.05 at 9:34 a.m. in New York.
Net income was $13 million, or 2 cents a share, compared with a loss of $1.12 billion, or $1.94, a year earlier.
Chairman Murdoch broke off News Corp. at the end of June 2013 from his more profitable entertainment businesses, including Fox Broadcasting and cable network Fox News. He recently failed in his attempt to acquire Time Warner Inc. to combine it with his entertainment company, 21st Century Fox Inc.
Murdoch withdrew his bid of $85 a share this week after Time Warner rejected the proposal.
“This is our resolute decision, which is why we formally withdrew our acquisition offer,” Murdoch said on a conference call following Fox’s earnings report.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and services.