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News Corp posts second quarter loss citing Australian newspaper impairments

Friday, 10 Feb 2017 06:48:50 | Peter Ryan

Mr Murdoch's media empire has been hurt by a continuing decline in advertising income. (Pascal Lauener: Reuters)

Rupert Murdoch's News Corporation has posted a second quarter loss citing impairments in its Australian newspaper business as a key factor.

The struggling empire reported a loss from continuing operations of $US219 million ($287 million) compared to a profit of $US109 million in the prior year.

News Corporation chief executive Robert Thomson said the results were hurt by a continuing decline in advertising income and "an impairment of the print-related fixed assets of our Australian newspaper business".

Mr Thomson said the loss included $US537 million of non-cash impairments and write down and a one-time gain from the sale of News Corporation's real estate business in Europe.

Mr Thomson pointed to "continued headwinds in print advertising" but that the losses were offset by a strong performance in the digital real estate division and "meaningful revenues" at News Corp's publishing arm Harper Collins.

The impact of the swing away from print advertising is underscored in the transition to digital advertising which now accounts for 27 per cent of News Corporation revenues.

One of Rupert Murdoch's premier print assets, the Wall Street Journal, now has 2.1 million paid subscribers with more than 50 per cent in digital.

"Audiences crave integrity, which is why is why so many of our mastheads have reported strong growth," Mr Thomson said.

However, revenues in cable networks fell by 2 per cent or $US2 million compared to the prior year because of lower affiliate advertising after losing rights to the Rugby World Cup.

News Corporation also reported a changing in the carrying value of its Australian cable television operation Foxtel, where net income decreased from $US52 million to $US24 million.

The media company is blaming a change in the value of Foxtel's investment in Ten Network and losses associated with its streaming service Presto, which was recently closed.

Revenue in the Murdoch family controlled company fell by 2.1 per cent to a market value of $US2.12 billion.

Follow Peter Ryan on Twitter and on his Main Street blog.

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