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Education unit drags News Corp to loss
[NEW YORK] News Corp said Wednesday it swung to a loss in the last quarter, as it wrote down the value of its education technology business, called Amplify.
The media group controlled by Rupert Murdoch and his family said it was now reviewing "strategic alternatives" for the education business, which sought to deliver digital content and analytics to schools.
As a result of the writedown and other one-time charges, News Corp posted a loss of US$379 million for the quarter ending June 30, following a profit of US$12 million in the same period last year.
Revenues for the period fell two per cent to US$2.14 billion for News Corp., which operates The Wall Street Journal, New York Post, The Times of London, The Sunday Times, a group of newspapers in Australia and the HarperCollins book publishing group.
"Thanks to solid performance across a number of our businesses, including the fast-growing realtor.com, we had a strong fourth quarter finish to a good fiscal year," said chief executive Robert Thomson.
"We have aggressively shifted the company to be more global and more digital." In the News and Information unit, revenues for the period dropped 10 per cent from a year ago to US$1.4 billion, while operating profit rose 29 per cent to US$169 million.
But its Digital Education division reported an operating loss of US$24 million following a US$53 million loss a year earlier.
The company said it recorded a charge of US$371 million to reflect the lowered value of that division.
A company statement said News Corp. is "reviewing strategic alternatives with respect to Amplify's remaining digital education businesses" and cited a "reduction in expected future cash flows for the business." News Corp launched the Amplify brand in 2012, as part of an effort to help bring new technologies to education. The group had purchased an education group called Wireless Generation for US$360 million in 2010.
One of the Amplify projects was a tablet computer aimed at primary and secondary schools.
Mr Murdoch, who spun off News Corp.'s faster-growing media-entertainment operations into 21st Century Fox in 2013, has been gradually moving away from day-to-day operations at the companies.
At News Corp, he holds the title of executive chairman and his son Lachlan is co-chairman.
A similar arrangement was announced this year at 21st Century Fox, where Mr Murdoch's son James is chief executive.