News Corp. reported earnings for their fiscal second quarter, ending December 31, with Harper Collins registering its third consecutive weak quarter. Sales of $442 million were down $52 million from a year ago, falling 11 percent. EBITDA fell further, down 28 percent, to $63 million from $88 million.
The company attributed the shortfalls “primarily due to the difficult comparisons to the prior year” — but it was a soft holiday compared to earlier periods, too. In 2017 sales were $469 million and EBITDA was $78 million.
Digital sales increased 5 percent compared to the prior year, primarily due to a 17 percent increase in downloadable audiobooks — implying another soft quarter for ebooks. Digital represented 19 percent of consumer sales for the quarter.
On the investor call, News Corp. ceo Rob Thomson said he expected “improvement in the second half given the timing of the release schedule, the continued popularity of The Dutch House by Ann Patchett and the recent successful release of Profiles in Corruption by Peter Schweizer.” Thomson also noted likely improvement in the second half because Q4 will have a “less-challenging prior year comparison.”
CFO Susan Panuccio added that “progress is being made” at ventures including “the partnership with Elizabeth Gabler’s group at Sony” 3000 Pictures, which they expect to “provide a longer-term payoff.”
Companywide, News Corp. sales were $2.48 billion, down from $2.63 billion in the prior year. EBITDA was $355 million, down from $370 million. The poor results were blamed on a sluggish Australian economy, uncharacteristic softness in book publishing, and foreign exchange fluctuations.
Earnings release