Filing discloses $183 million settlement costs in fiscal 2013 tied to phone-hacking scandal
In its first earnings report since its split from the Rupert Murdoch-controlled TV and film assets, publishing company News Corp. reported a $506 million profit in the fiscal year ended June 30 vs. a $2.1 billion loss a year earlier.
The profit equaled about 87 cents per share, compared to the loss of $3.58 per share a year earlier. Its earnings include a writedown of about $1.4 billion in the fourth quarter due to the decline in value of U.S. and Australian publishing assets. Nevertheless, its earnings were an improvement over a year earlier, when the company took a $2.9 billion writedown on the publishing side.
On June 28, News Corp.’s film and TV assets were split into a newly named 21st Century Fox, while the publishing assets retained the News Corp. moniker.
The company, which includes Dow Jones, the New York Post and HarperCollins Publishers, said that revenue increased by 3%, to $8.9 billion, for the fiscal year. News Corp. said the increase was driven by the consolidation of Fox Sports Australia and the acquisition of Thomas Nelson, as well the launch of the Sun on Sunday in the U.K. last year.
But declining print advertising revenue continues to plague its Dow Jones division, where revenue fell by $76 million, the company said. Overall advertising revenue and its news and information services division saw revenue dip by 10%, to $3.9 billion, while circulation and subscription revenue rose by 2%.
The company also attributed the net income to the gain on its acquisition of Consolidated Media Holdings as well as a gain from the sale of its investment in Sky Network. It also said that it had lower impairment and restructuring charges of $1 billion.
News Corp. and 21st Century Fox are still dealing with the fallout from the phone hacking scandal, forcing it to make millions in civil settlements. The Department of Justice has been conducting an investigation connected to the scandal, and News Corp. said in a filing that it and 21st Century Fox are “cooperating” with the probes.
News Corp. said that it has incurred legal and civil settlement costs related to the scandal of about $183 million in the 2013 fiscal year, and $199 million for the 2012 fiscal year. It said it has “accrued approximately” $66 million for its estimate of liability for other claims and costs.
The company said that it “expects to pay regular cash dividends in the future,” but it will be left to the discretion of the board of directors.