UPDATE 3-News Corp revenue slumps in first standalone quarter

Mon Nov 11, 2013 6:30pm EST
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By Jennifer Saba

Nov 11 (Reuters) - Rupert Murdoch's News Corp reported a steeper than expected 3 percent decline in revenue in its first quarter as a standalone company, as weakness at its Australian newspapers took its toll.

News Corp shares fell 4 percent in after-hours trading on disappointment over the $2.07 billion revenue figure, which missed a Thomson Reuters I/B/E/S forecast of $2.2 billion.

"The revenue was clearly weaker than expected," said Doug Arthur, an analyst with Evercore Research.

News Corp split from its more profitable sister entertainment business 21st Century Fox Inc in July and now includes newspapers ranging from The Wall Street Journal, Times of London, and The Australian, book publisher HarperCollins, Australian pay-TV and digital real estate stakes, and a fledgling education unit Amplify.

The separation happened as newspapers face unprecedented challenges because advertisers are shunning the medium in favor of splashier digital properties and readers are ditching print subscriptions.

At News Corp, newspapers along with its marketing services company, represents about 70 percent of company's revenue and almost a vast majority of its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Revenue at that division fell 10 percent to $1.5 billion on a 25 percent decline in ad revenue at its Australian newspapers - the building blocks of Murdoch's empire. EBITDA increased 6 percent to $133 million because of cost cutting.   Continued...