Rupert Murdoch’s News Corp is depending on its digital property listings business for future earnings growth, as revenues from its news business continue to slide.
The media giant on Friday reported first quarter earnings had suffered a 15 per cent fall to $US165 million ($A230.91 million), mainly on account of a weak print advertising market in Australia and currency fluctuations from a lower Australian dollar.
Revenues declined four per cent to $US2.01 billion.
Its digital property listings business lifted revenue 71 per cent to $US191 million, helped by the 2014 acquisition of US online real estate group Move Inc.
The division reported flat earnings, although its main Australia-listed business REA Group lifted earnings 30 per cent to $A82 million as a local property boom fuels strong listing volumes.
“We have aggressively shifted focus to the digital real estate business and believe REA Group will be the core pillar of future earnings,” chief financial officer Bedi Singh told analysts.
Newscorp has been expanding the business globally, as a means to offset declining advertising revenue from its newspapers. Earlier this week REA launched a $750 million takeover bid for Southeast Asia-focused rival iProperty.
The shift mirrors the fortunes of its Australian media rival Fairfax, which on Thursday said revenue at its own real estate advertising business Domain had jumped 68 per cent so far this year, while the print publications had reported a nine per cent slide in revenues.
News Corp’s stable of newspapers, which include The Australian, The Times in Britain and The New York Post, suffered an 11 per cent decline in revenues during the quarter.
“Foreign exchange fluctuations negatively impacted reported results, but this should not obscure the progress at many of our businesses,” chief executive Robert Thomson said.
News Corp said earnings (before interest, tax, depreciation and amortisation) from its News and Information business fell 21 per cent in the three months to September 30.
Advertising revenue in the segment was down 13 per cent during the quarter, while circulation and subscription revenues declined six per cent.
“We are actively examining cost structures at News Australia and looking at operational efficiencies,” Mr Singh told analysts.
The media company also said pay TV subsidiary Foxtel, which it owns in partnership with Telstra, suffered a 37 per cent slide in US-reported earnings to $US140 million, due to higher programming and marketing costs and a lower Australian dollar.
News Corp’s overall quarterly net profit rose 31 per cent to $US143 million, thanks to a tax benefit on the recent sale of its US digital education business Amplify.
At 1145 AEDT, News Corp shares were trading 1.1 per cent lower at $21.45 each.