News Corp wrote down the value of its Amplify digital-education unit, heralding the start of a strategic review of that division in a move that resulted in the company recording a net loss of $379 million, according to its 4th quarter report.
The company also reported its full year results for fiscal 2015 at the same time.
While News Corp said it would no longer be marketing Amplify products to new clients, it would however continue servicing the divisions existing customers. The impairment charge for the division was a total of $371 million.
The nuts and bolts of the report indicated that revenue decreased by 2% to $2.14 billion for Q4 as a result of a 10% fall off in revenue from the news and information segment which delivers almost 66% of News Corp’s total revenue. The negative impact of the stronger U.S. dollar on foreign income and a decline in advertising revenue were the prime causes of the lower revenue.
Excluding the one off impairment charge and additional items, News Corp found it possible to post adjusted earnings of 7 cents a share. The EPS beat the Thomson Reuters forecast of 5 cents per share while the revenue of $2.14 billion was below the forecast $2.19 billion. Meanwhile, the company's earnings before interest, taxes, depreciation and amortization (Ebitda) increased by 50% to $191 million as a result of a decrease in costs at both the news and information services and the digital education segments.
News Corp also announced that the Board of Directors had passed its first semi-annual cash dividend of 10 cents per share.
Commenting on the results, News Corp CEO Robert Thomson said, “Thanks to a solid performance across a number of our businesses, including the fast growing Realtor.com, we had a strong fourth quarter finish to a good fiscal year. Despite an uneven global economy, very tough currency headwinds and the ongoing transformation of the media landscape, for fiscal 2015 we posted stable revenues, robust EBITDA growth and healthy free cash flow.”