Rupert Murdoch’s newspaper operations have suffered a 25 per cent profit slump due to News International’s investment in full-colour printing.
Announcing its first quarter results this morning – covering the three months from July to the end of September – News Corporation said its UK newspaper division, publisher of the Sun, Times, Sunday Times and News of the World, had seen a slight rise in circulation revenues offset by a small decline in advertising income compared with the same period last year.
News International’s £650m move to full-colour printing would be completed “sooner than anticipated”, it said. Profits this quarter had been dented because the depreciation of the old printing presses had to be taken into account.
Overall, News Corp’s global newspaper operations saw profits fall this quarter to $93m from $124m last year. Magazine publishing profits were stable.
Work on a new multi-million pound colour printing plant in north London is almost complete, with the first papers expected to be produced there early next year and a full switchover from Wapping expected next summer.
Last month, Rupert Murdoch opened News International’s new colour printing plant in Glasgow – which the company claims houses the largest and fastest press in the world, producing 86,000 copies an hour. Another site, in Knowsley, near Liverpool, is also in the pipeline.
Murdoch’s Australian newspaper division saw profits grow this quarter due to strong display and classified advertising revenues – especially in retail and job ads. Circulation revenues in Australia had also increased slightly, mainly from higher cover prices at the major weekend papers.
News Corporation this morning posted first quarter revenues of $7.1bn for the three months from July to the end of September. This is up 19 per cent on the same period last year.
Operating profits at the group in this three-month period stood at $1.05bn – a year-on-year rise of 23 per cent.
One of the biggest growth areas was US cable TV network, Fox News, which more than doubled its operating profit compared with the first quarter of last year, thanks mainly to an increase in advertising rates.
Cable profits between July and September were up from $249m last year to $289m. Satellite TV posted a $48m profit compared with a $13m loss in the same period last year.
Murdoch said his company had experienced “a great start” to the new financial year.
“We expect the development of [cable television] assets to drive future growth, much as our investments in the Fox News Channel have translated into strong profit growth today,” he said.