February 9, 2017 / 9:35 PM / 6 months ago

News Corp's adjusted profit edges past analysts estimates

A sign is seen outside News Corporation building in New York, June 27, 2012.Brendan McDermid/File Photo

(Reuters) - News Corp (NWSA.O), the owner of Dow Jones Newswires and book publisher HarperCollins, posted an adjusted profit that edged past analysts' estimates for the first time in three quarters as the drop in ad sales in its news business was offset by growth in its other businesses.

Shares of the media conglomerate were up 1.6 percent at $12.59 after the bell on Thursday as investors looked past the Rupert Murdoch-controlled company posting its second straight quarterly net loss, which was mainly due to impairment charges.

The company's news and information business, which includes the Wall Street Journal and the Times in London, has been suffering from lower ad sales as readership dwindles, with readers opting for free news on websites and mobile apps.

Revenue in the business fell nearly 7 percent to $1.30 billion in the second quarter, missing analysts' average estimate of $1.34 billion, according to FactSet Street Account.

Advertising revenue fell 8.3 percent to $748 million.

News Corp has been cutting jobs and saving costs, while investing in its digital publishing business to boost margins. The company said subscribers to the digital version of the WSJ accounted for more than half of total subscribers for the first time ever.

The news business's EBITDA (earnings before interest, tax, depreciation and amortisation) beat analysts' estimates, as did EBITDA at its other businesses – book publishing, digital real estate services and cable network programming, according to FactSet Street Account.

The real-estate business has been a particular bright spot for News Corp recently. It includes REA Group Ltd (REA.AX), a real estate ad company in Australia, and Realtor.com in the United States and other countries.

Revenue in the business surged 16.3 percent in the quarter to $242 million, in line with analysts' estimate.

While the outsized contribution of the news business – about 60 percent of total revenue – meant News Corp's revenue fell 2.1 percent to $2.12 billion, the decline was in line with analysts' estimates, according to Thomson Reuters I/B/E/S.

The net loss available to News Corp shareholders was $290 million, compared with a year-ago profit of $62 million.

The latest quarter includes $537 million in impairment charges for write-downs related to the company's Australian newspaper and television assets. That was partially offset by a $121 million tax benefit on the charge and a $120 million gain on the sale of REA's European businesses.

On an adjusted basis, News Corp earned 19 cents per share, edging past analysts' average estimate of 18 cents.

Thomson Reuters (TRI.N) (TRI.TO), the parent of Reuters News, competes for financial customers with Bloomberg LP and News Corp's Dow Jones.

Reporting by Laharee Chatterjee in Bengaluru; Editing by Savio D'Souza

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