Declining ad sales led to a drop in revenue for News Corp. in the second quarter, while the company expressed confidence in digital initiatives and posted improved earnings before the deduction of interest, tax and amortization expenses.

Revenues of $2.24 billion were 4% lower than a year earlier, as its news and information services segment saw lower advertising revenues and the company was hit by foreign exchange fluctuations and the sale of Dow Jones Local Media Group. News Corp.’s second quarter ended on Dec. 31.

The company’s stock price was up 4.24% in after-hours trading, as its results beat analyst expectations.

Second quarter EBITDA of $327 million was a 9% increase over a year earlier, mainly due to the consolidation of Fox Sports Australia, as well as stronger performance in its digital real estate and book publishing segments. The company also said that there were lower costs for payout of claims and investigations related to the News of the World newspaper scandal. CFO Bedi A. Singh said that expenses related to the settlements were $19 million in the most recent quarter.

The company’s net income was $150 million, compared to $1.4 billion a year earlier. The latter figure includes a gain of about $1.3 billion related to its acquisition of Consolidated Media Holdings in November, 2012. Adjusted earnings per share was flat at 31 cents per share, above estimates, compared to the prior year.

“The earnings report demonstrates a measure of progress as we navigate a challenging advertising market,” said CEO Robert Thomson. “We are continuing to be disciplined on costs, while making opportunistic investments that will extend our revenue reach.”

Ad revenue fell 10% among news and information services, while Thomson and Singh said that they have made progress in stemming the losses. They said in a conference call with analysts that newspaper properties in Australia continue to be particularly hit hard. Revenue in the news and information division was $1.6 billion, down 9% from $1.8 billion a year earlier. EBITDA for that segment was $255 million, down 13% from $292 million a year earlier.

In a conference call with analysts, Singh said that “cost cutting has gone on apace across all divisions,” and that they “are looking at head counts closely.”

The company announced last month that Lex Fenwick, CEO of Dow Jones, was departing, to be replaced in the interim by William Lewis, as the company reviews its strategy for the division.

A brighter spot for the company was in the book publishing division, where revenues increased 4% to $391 million, driven by sales of the “Divergent” series as well as Mitch Albom’s “The First Phone Call from Heaven” and Ree Drummond’s “The Pioneer Woman Cooks: A Year of Holidays.” EBITDA for book publishing increased 33% to $68 million, in part because of the increased profitability of e-books.

Thomson said that “it is reasonable to expect” that the release of the  “Divergent” movie next month will help “stimulate book sales.”

News Corp. is the successor to the split of the Rupert Murdoch-controlled assets last year. It includes the Wall Street Journal and other newspaper assets, as well as the HarperCollins publishing division.