Rupert Murdoch's News Corp. falls short of Wall Street expectations in its release of its inaugural earnings. (File/UPI/Jim Ruymen) | License Photo
(UPI) -- Rupert Murdoch's News Corp. first-quarter earnings disappointed Wall Street after seeing "headwinds" in Australian newspaper sales and declining ad revenue. This is News Corp.'s inaugural quarter after splitting in June from 21st Century Fox Inc., also chaired by Murdoch.
New York-based News Corp. reported sales at $2.07 billion, 3 percent lower compared with $2.13 billion in the year prior. Analysts surveyed by Bloomberg expected $2.18 billion.
News Corp.'s Australian papers, including The Australian and the Herald Sun, accounted for 70 percent of News Corp. losses. Advertising revenue for the segment fell 12 percent, while circulation and subscription revenue fell 6 percent.
Meanwhile, the Australian television business boosted profits. News Corp. fully acquired Fox Sports Australia last November.
"There are certainly headwinds in Australia, magnified by inauspicious foreign currency movements," said News Corp. CEO Robert Thomson in a company release.
"But we have been consistently cost conscious and are transforming our publishing operations longer-term into multi-platform businesses." Cost cutting in news and information helped boost profits.
News Corp. owns Dow Jones, the parent company of the Wall Street Journal. New Corp. saw better performance in U.S. and U.K. newspapers and Thomson predicted the rise in tablets will drive digital ad sales. He reported in a conference call with investors that mobile growth rose 59 percent in September 2013 compared with September 2012 for the Wall Street Journal.
Net income rose to $38 million, or $0.05 per share, compared with a net loss of $83 million, or a loss of $0.16 per share, in the year prior.
Earnings were released after trading Monday, and shares fell more than 2 percent to $17 in extended trading.