NEWS CORPORATION LIMITED REPORTS RESULTS FOR THE FIRST QUARTER
NEW YORK, Nov. 7 /PRNewswire/ -- The News Corporation Limited (NYSE: NWS) today issued the following results for the three months ended Sept. 30, 1991:
-- Operating revenue down 4 percent to $2.7 billion.
-- Operating profit before abnormal items up 315 percent to $107.5 million.
-- Profit after abnormal items up 95 percent to $106.5 million.
-- Earnings per share before abnormal items up 200 percent to $0.36.
THE NEWS CORPORATION LIMITED
Unaudited Consolidated Results
(Dollars in thousands, except per share data)
Three months ended Sept. 30 1991 1990
Revenues (A) $2,662,481 $2,782,221
Operating income (A) 420,241 333,774
Other income (expense)
Dividends 6,416 16,580
Associated companies profit/(loss) (39,608) 156
Interest expense (net) (255,510) (285,442)
Operating profit before income
tax expense and abnormal items (B) 131,539 65,068
Income tax expense (C) 8,037 8,520
Operating profit before minority
interests and abnormal items 123,502 56,548
Minority interests in subsidiary companies 16,049 30,688
Operating profit before abnormal items 107,453 25,860
Abnormal items (net) (D) (990) 28,862
Operating profit and abnormal items 106,463 54,722
Earnings per share
Operating profit before abnormal items $0.36 $0.12
Abnormal items -- $0.09
Operating profit and abnormal items $0.36 $0.21
Three months ended Sept. 30 1991 1990
United States 1,706,800 $1,565,072
United Kingdom 446,192 601,751
Australia and Pacific Basin 509,489 615,398
United States 269,205 262,018
United Kingdom 61,335 (19,058)
Australia and Pacific Basin 89,701 90,814
Newspapers 694,517 750,741
Magazines 235,570 321,175
Television 305,726 352,618
Filmed entertainment 622,767 399,659
Book publishing 465,084 555,580
Other 338,817 402,448
Total 2,662,481 2,782,221
Newspapers 122,903 113,992
Magazines 48,854 59,065
Television 52,345 (19,349)
Filmed entertainment 48,503 15,464
Book publishing 101,692 101,752
Other 45,944 62,850
Total 420,241 333,774
(A) Supplementary segment information by geographic area
(B) Included in operating profit before income tax for holding
company and subsidiaries are:
Interest on borrowings 270,285 306,990
Interest income 14,775 21,548
Net interest expense 255,510 285,442
Depreciation and amortization 58,087 85,932
Foreign exchange trading gains -- 6,946
(C) Income tax expense comprises of:
Holding and subsidiary companies 7,290 7,517
Associated companies 747 1,003
Total 8,037 8,520
(D) Abnormal items (net of tax)
Holding and subsidiary companies (16,433) 6,992
Associated companies 15,443 21,870
Total (990) 28,862
Commentary Group Result
The News Corporation today reported after-tax profits before abnormal items for the quarter ended Sept. 30, 1991 of A$107.5 million (A$0.36 cents per share) an increase of 315 percent from the same period last year of A$25.9 million (A$0.12 per share). This result includes losses from equity-accounted investments of A$39.8 million compared to a profit of less than A$1 million a year ago.
Profits increased despite a fall in revenues of 4 percent to A$2.7 billion from A$2.8 billion, which was due in large part to the sale of businesses in the United States and Australia. Profit after abnormal items was A$106.5 million compared to the prior-year period of A$54.7 million.
Operating profit increased to A$420.0 million from A$333.8 million in the comparable period. This result includes higher profits from Twentieth Century Fox Film in the United States and substantially improved newspaper operations in the United Kingdom. Earnings for the quarter also reflect the elimination of operating losses at Sky television. In November 1990, Sky merged with its only competitor and is now accounted for as an equity investment. Last year's result also included profits from nine U.S. magazines, which were sold in June 1991, and the benefit of approximately A$7 million in foreign exchange trading gains.
Losses from equity interests reflects results from Ansett and East- West Airlines, the company's airline interests in Australia, BSkyB, the company's television operations in the U.K. and Super Zeitung, a newly launched newspaper in eastern Germany.
Interest expense declined as a result of lower interest rates and preference dividends decreased due to the redemption of these shares.
On Oct. 21, the company announced that two of its subsidiaries had issued US$175 million of exchangeable preference shares in a private placement to three investors.
On Oct. 23, the company announced the flotation of 55 percent of its Australian magazine and commercial printing operations, which will raise approximately A$682 million and is expected to close in December.
The company announced on Oct. 31 that it was preparing an offering of approximately US$450 million of equity and a separate offering of not less than US$250 million of long term debt. The purpose of the offerings is to permit the company to reduce bank indebtedness, to strengthen its financial position and to add to its working capital. The equity offering will be subject to the approval of News Corporation shareholders at an extraordinary meeting to be held on Dec. 6, 1991.
Operating profits in the U.S. improved by 3 percent despite poor economic conditions and the sale of eight magazines and one newspaper in June 1991.
Profits at Twentieth Century Fox Film were higher than last year while results at Fox Broadcasting Company and the Fox Television Station group were maintained at last year's levels. Rating at Fox Broadcasting increased significantly year to year. For the month of September, Fox Broadcasting ranked number one in the key demographic categories of men aged 18-34 and all persons 12-34; Fox ranked number two in adults 18-34.
Improved margins at HarperCollins led to relatively flat results for the company's book publishing division. Revenues declined, in large part, due to the sale of the Gordon and Gotch book publishing division in Australia.
Operating profit in the United Kingdom was better than a year ago due to improved operating margins at the company's five newspapers arising from reduced staffing and a full quarter's benefit of cover price increases.
The effects of the merger of Sky television, as discussed earlier, also led to improved results in the U.K.
Operating profits in Australia and Hong Kong were basically even compared to a year ago despite deteriorating economic conditions and a reduction in revenues.
Cost cutting throughout the division and the benefits from the merger of two newspapers in Sydney and Melbourne, and the closure of a Sunday newspaper in Melbourne, aided results.
Sky exhibited tremendous growth in total homes reached by the six- channel service and in pay movie subscribers during the quarter.
Total homes reached in the U.K. at the end of September was 2.4 million, compared to 1.6 million when the business merged with its only competitor, BSB. The launch of a new comedy channel in early October brings to six the number of channels now available via Sky.
Before the launch of the Comedy Channel and with only five channels, Sky captured approximately 30 percent of the total viewing time in homes equipped to receive Sky during the 13 week period ended Aug. 4, 1991, according to an independent television rating agency.
The company's 50 percent-owned equity interest in Ansett Transport Industries and East-West Airlines in Australia, continued to show losses, although September saw record traffic levels and load factors.
/CONTACT: Peter Rosenthal or Martha Cid of Howard J. Rubenstein Associates, 212-489-6900, for News Corporation/
(NWS) CO: News Corporation Limited ST: New York IN: PUB SU: ERN SM-OS -- NY011 -- 2113 11/07/91 10:17 EST