NoW closure hits News Corp profits

The closure of the News of World contributed to a 38 per cent drop in operating income at News Corp's newspaper division, the company announced this morning.

News Corp was also hit with $91m (£57m) in restructuring costs as a result of the decision to close the scandal-hit title in July.

Results released today show total revenue for News Corp in the first quarter of its financial year stood at $7.96bn (£4.98bn), up 7 per cent year on year. Operating income was up 21 per cent to $1.39bn, thanks to a strong performance by its its cable TV division, but overall net income was down 3 per cent to $738m

Operating income from its newspaper publishing business – which includes The Sun, The Times, The Sunday Times, the New York Post and the Wall Steret Journal – fell from $110m (£68.9m) to $68m (£42.5m) year on year, which the company said reflected the 'impact from the closure of The News of the World in the UK as well as lower advertising revenues at the Australian newspapers and integrated marketing services business".

It also claimed the drop was partially offset by higher advertising and circulation revenue at The Wall Street Journal.

Commenting on the results, chairman and chief executive officer Rupert Murdoch said: 'The exceptional strength of our financial results during the first quarter across the majority of our segments is confirmation that News Corporation's core operations are strong and that we are on course to achieve our strategic and financial objectives.

'While we continue to remain mindful of the persistent economic uncertainty in many parts of the globe, I am proud of News Corporation's achievements over the past quarters.

"We have leveraged our strong assets and solid management team to successfully navigate these unpredictable times. Coupled with our long-term view, I have every confidence that we will build upon these results in the coming quarters and continue to provide consistent stockholder value."

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