News Corp revenues fall 3% in last quarter amid circulation decline

'Challenging advertising environment' and legal bill for phone hacking scandal ate into revenues of Murdoch's news division

News Corp revenues fell 3% in the last quarter, the company said on Thursday amid a "challenging advertising environment" and declines in circulation revenues.

For the company's first full year as a standalone company News Corp reported revenues of $8.57bn (£5.01bn) compared with $8.89bn (£5.28bn) in the prior year. Fourth quarter total revenues were $2.19bn (£1.30bn), down from $2.26bn (£1.34bn) for the same quarter last year.

The company's news division, its largest and whose titles include the Times and the Sun in the UK, Wall Street Journal and the New York Post in the US and the Australian, reported a sales decline of 6% to $1.56bn (£0.9bn), driven by a 9% decline in advertising revenues and a 4% decline in circulation revenues.

The company reported another $32m (£19m) in gross legal fees and costs related to the hacking scandal at its UK newspaper division. The bill for the solicitors and barristers who have been dealing with both criminal and civil cases in the Old Bailey and the high court over the last year brings now stands at $169m (£100m) for the last financial year.

The company's book publishing division, which includes HarperCollins, reported stronger growth. Full year revenues increased $65m (£38.6m), or 5%, to $361m (£214m) compared to the prior year and up 10% in the last quarter, driven by the success of the Divergent series by Veronica Roth which sold more than 19m net units throughout the year.

News Corp chief executive officer Robert Thomson said: "We finished our first full year as the new News Corp and made significant progress in achieving the mission we articulated at the outset – to be more global and more digital through organic growth, product launches and strategic acquisitions."

"While we are operating in a challenging advertising environment, our results highlight the diversification of our portfolio and our cost discipline, leading to improved free cash flow and a firm foundation for sustained growth."

Media mogul Rupert Murdoch broke off News Corp from 21st Century Fox at the end of June 2013 . This week Murdoch confirmed he had withdrawn his unsolicited bid for Time Warner.


Dominic Rushe in New York

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