News Corp. reports profit but faces soft ad market

News Corp. said Monday its first full quarter of operation as a standalone company was profitable, but the publisher of The Wall Street Journal continued to face a sluggish advertising market.

Its fiscal first quarter net income – not including earnings from operations that it doesn't fully control - totaled $27 million, reversing from a loss of 92 million. Despite reporting lower ad sales, the bottom line turnaround was due to smaller restructuring charges compared to a year-ago period.

Revenue for the three months period that ended on Sept. 30 fell 3% to $2.07 billion, partly reflecting its sale of the Dow Jones Local Media Group that published local newspapers in the Northeastern U.S.

Ad sales company-wide fell 8% to $958 million. But revenues from circulation and subscription rose 11.6% to $679 million.

Adjusted earnings per share, not including some charges, were 3 cents vs. 6 cents in the prior year.

In late June, News Corp. fully split from its sister company that runs movie studios and TV networks – now called 21st Century Fox – after a year of planning. Rupert Murdoch, chairman of the companies' former parent, also called News Corp., remains the chairman of both the new News Corp. and 21st Century.

"Our first quarter as the new News was the beginning of a journey in the digital development of the company," said News Corp. CEO Robert Thomson, in a statement. "There are certainly headwinds in Australia, magnified by inauspicious foreign currency movements, but we have been consistently cost conscious and are transforming our publishing operations longer-term into multi-platform businesses."

The News and Information Services division, whose holdings include the Journal, British tabloid The Sun and several Australian newspapers, reported a 10% decline in revenue to $1.5 billion.

With the Australian market particularly weak, the division's advertising revenues fell 12%. The decline was more modest at Dow Jones, which publishes the Journal and Barr! on's.

Revenue at its HarperCollins book publishing division fell 7% to $328 million as improved e-book sales weren't enough to offset the divestiture of an events business and "softness" in the Christian publishing market, the company said.