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News Corp profit beats as cost cuts in news business

News Corp reported a better-than-expected quarterly profit on Wednesday, helped by cost cuts in its news and information services business that includes Dow Jones and the Wall Street Journal.
Shares of the company, controlled by Rupert Murdoch, rose about 4 percent in extended trading.
The company kicked off in June a major reorganization including job cuts at Dow Jones.
Revenue at the news and information business fell 10 percent in the fourth quarter as newspapers advertising revenue continued to slide as readers shift to digital media.
Still, investors were upbeat about the company’s core business.
“People think that video killed the radio star and the Internet killed the newspaper star,” said Bill Smead, CEO of Smead Capital Management that owns about 2.2 million shares of News Corp.
“The brands that are owned by News Corp produce well-written words and well-made content, (so) the distribution system won’t end up mattering that much,” Smead said.
News Corp, whose revenue is largely dependent on its newspaper holdings in the United States, Australia and Great Britain, has been diversifying its business.
The company has benefited from strong growth in its digital real estate business, which include U.S. website and a stake in Australian REA Group .
The company said in May surpassed Trulia to become the second most popular real estate listings website in the United States.
Revenue in its book publishing business, which includes HarperCollins Publishers, rose 8 percent in the fourth quarter. Revenue from digital real estate services rose 67 percent.
Total revenue fell 2 percent to $2.14 billion, missing the average analyst estimate of $2.19 billion, according to Thomson Reuters I/B/E/S.
Net loss available to the company’s stockholders was $379 million, or 65 cents per share, in the quarter ended June 30, compared with a profit of $12 million, or 2 cents per share, a year earlier.
Excluding items, the company earned 7 cents per share, above the estimated 5 cents.
The company recorded an impairment charge of $371 million related to its digital education business.
News Corp said its would review strategic alternatives for Amplify, its flagship digital education brand.
“We and most investors had basically written off Amplify,” Macquarie Research analyst Timothy Nollen told Reuters.

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