Latest News Corp report

News corp. have just release their earning report for the last quarter of 2008. To me, it does not look good. What is particularly interesting to us is what it said about its Australian operation.

The Australian newspaper group reported 18% lower second quarter operating income in local currency terms versus the second quarter of fiscal 2008 primarily due to lower classified advertising revenues resulting from declines in the employment and auto sectors and higher costs associated with pension expenses and headcount reductions.

Overall advertising revenues were down 4% as compared to a year ago. Circulation revenues were in line with the second quarter of the prior year.

{emphasis added}

However it confirms what I have been saying, the immediate problem with newspapers is the drop in advertising not circulation. What is a worry is that in Australia News Corp is probably less affected by the advertising drop than most other newspapers.

The full report is available here.