News Corp's global profits dropped 28 percent in the 2016 financial year as growth in its digital real estate business failed to offset a decline in news operations.
The company said a 65 per cent decline in earnings before tax - from $US603m to $US214m - for its newspaper business that includes The Australian, The Daily Telegraph, The Times of London and The New York Post was partly due to the $US280 million cost of settling a long-running legal dispute involving the News America Marketing business.
Excluding that cost, earnings from news and information dropped 18%. Book publishing earnings dropped 16% to $US185m despite the success of titles including Go Set A Watchman by Harper Lee.
The company’s Digital Real Estate Services segment increased revenue by 32 per cent and posted a 71 per cent higher profit of $US344 million. The inclusion of results from Move, acquired in late 2014, boosted the outcome, as well as the strong performance of Asia-Pacific subsidiary REA Group.
CEO Robert Thomson said the company had made progress on its goal to become more digital and global.
“We ended Fiscal Year 2016 with strong results in the fourth quarter, highlighted by robust year-over-year growth in revenues and EBITDA at Digital Real Estate Services and an upturn at HarperCollins," said Thomson.
"Over the past year, we made clear progress on our primary goals – to become more digital and more global. Since the advent of the new News three years ago, revenue at Digital Real Estate Services has more than doubled, and it is expected to become the biggest contributor to EBITDA in the future thanks to the ongoing success of REA and the rapid growth at Realtor.com® in the U.S. Our reach in digital real estate is unparalleled and highlights the potential of the News Corp network, which is monetizing shared data and maximizing the value of content and traffic.
"Book Publishing ended the year strongly, highlighting our ability to leverage quality content across both print and digital platforms.
"While global print ad trends remain challenging at our News and Information Services segment, we are continuing our aggressive growth in digital, which now accounts for 23% of segment revenues, up from 19% last year."