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News Corporation Reports Second Quarter Results For Fiscal 2014

Stocks in this article: NWS NWSA

On a stand-alone basis, revenues declined 3% versus the prior year revenues of $113 million, as advertising market share gains, an increase in digital platform subscribers and higher affiliate pricing were more than offset by adverse foreign exchange fluctuations. Segment EBITDA increased 20% on a stand-alone basis, compared to the prior year Segment EBITDA of $44 million, primarily driven by lower programming costs, which were impacted by the absence of domestic cricket rights compared to the prior year. Excluding the impact of foreign exchange fluctuations of $13 million and $6 million on revenues and Segment EBITDA, respectively, revenues increased 9% from the prior year and Segment EBITDA increased 34%.

For the three months ended December 31, 2012, on a stand-alone basis, FOX SPORTS Australia had operating income of $42 million and depreciation of $2 million.

Digital Real Estate Services

Revenues in the quarter increased $16 million, or 18%, compared to the prior year reflecting increased residential listing depth product penetration. Segment EBITDA in the quarter increased $9 million, or 20%, compared to the prior year primarily due to the increased revenues as noted above. Excluding the impact of foreign exchange fluctuations, revenues and Segment EBITDA increased 32% and 33%, respectively.

Book Publishing

Revenues in the quarter increased $14 million, or 4%, compared to the prior year driven by strong performance in Children’s and General Books resulting from sales of the Divergent series by Veronica Roth, following the launch of Allegiant in October 2013, The Pioneer Woman Cooks: A Year of Holidays by Ree Drummond and The First Phone Call from Heaven by Mitch Albom. The revenue increase was partially offset by the divestiture of the Women of Faith live events business and the decision to exit the third party distribution business in the U.S. E-book revenues improved by 39% versus the prior year period and represented 17% of revenues, up from 14% in the prior year. Segment EBITDA increased $17 million, or 33%, from the prior year benefiting from the higher contribution to profits from e-books and ongoing operational efficiencies coupled with higher revenues. Excluding the impact of acquisitions, divestitures, and foreign exchange fluctuations, revenues increased 8% and Segment EBITDA increased 38%.


Revenues in the quarter decreased $10 million, or 31%, compared to the prior year primarily due to declines at Amplify related to lower project-based consulting revenues at its Insight business coupled with divestitures of certain of the Company’s non-core Australian businesses during fiscal 2013. Segment EBITDA in the quarter improved $4 million, primarily due to decreased fees and costs, net of indemnification, related to the U.K. Newspaper Matters of approximately $30 million, partially offset by higher investment spending of $10 million at Amplify primarily resulting from increased product and curriculum development, $8 million incurred by the corporate Strategy and Creative Group related to the development of new products and services and international rights acquisitions and higher corporate overhead expenses of $11 million compared to an allocated basis used for fiscal 2013.

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