Rupert Murdoch’s newspaper business News Corporation has produced a third consecutive profit since being split from the group’s more profitable TV and film assets.
The so-called “new” News Corporation produced a $US150 million ($A168.81 million) net profit for the second quarter of the 2013/14 financial year.
Mr Murdoch in 2013 bowed to pressure from investors not interested in his newspapers and their falling circulation, and split the company’s operations into a media and entertainment business and separate publishing arm.
However, despite ad income falling, the newspaper-dominated group is still making money, posting a $US38 million first quarter net profit and $US506 million full year profit in 2012/13, when it was not formally split but released a result for the publishing assets.
Investors sent the stock soaring on Friday, with its ordinary shares up $1.41, or 8.2 per cent, to $18.61 and non-voting shares up 9.1 per at $19.00, following a five per cent hike in its US listing.
Profit rose 9.0 per cent at the earnings before interest, tax, depreciation and amortisation (EBITDA) level to a better-than-forecast $US327 million from a year ago.
That was due to large earnings jumps in its pay TV division through more Foxtel subscriptions, digital real estate and book publishing businesses and lower restructuring costs and expenses from the UK hacking investigation.
Quarterly earnings for the newspapers, which include The Australian, Herald Sun and Wall Street Journal, fell 13 per cent to $US255 million.
While the Australian newspaper ad revenues are falling far more than in the US and UK, it was largely due to the weaker Australian dollar, rather than businesses using online rivals instead.
Chief executive Robert Thomson said Australia remained very challenging, but he was determined to improve the financial performance of the newspapers, praising the leadership of new Australia chief Julian Clarke.
“We’re developing a more coherent digital strategy that reflects the local strengths of the mastheads, making a greater connection between the masthead and the local population,” he said in a teleconference from New York.
“Our aim is to have a single cost of content and re-purpose content across platforms: whether a real estate listing, a great news scoop or a (book) thriller on the canvas of mobile phone, tablet or newspaper.”
IG market strategist Evan Lucas said the company was keeping its promises from last year when it split from the new 21st Century Fox group.
The fact the share price had risen so highly reflected that, he said.
“Rupert Murdoch said last year where they saw growth happening: in the digital space particularly and we knew print media would struggle for a couple of years,” Mr Lucas told AAP.
The company has increased cash on the balance sheet since the split from $US2.1 billion to $US2.9 billion, raising hopes of some sort of shareholder return.
