News Corp Posts Loss on Education Write-Down

News Corp swung to a net loss of $379 million in the most recent quarter after it wrote down the value of its digital-education business. But reduced costs helped bolster its adjusted operating earnings, and the media company said it would start paying a dividend for the first time.

On a conference call Wednesday, Chief Executive Robert Thomson said the company is in advanced negotiations with a potential acquirer for its Amplify digital-education business. News Corp said it would cease marketing Amplify’s Access products to new customers but continue to provide service to existing customers. The impairment charge for the division amounted to $371 million.

The Wall Street Journal reports News Corp had invested heavily in its Amplify subsidiary, led by former New York City Schools Chancellor Joel Klein. Launched in 2012, Amplify is built around a tablet-based learning platform and digital curriculum. While it reviews options, News Corp said it would cease production of the dedicated tablet product but continue to develop the curriculum software.

Overall, revenue fell 2% to $2.14 billion in the fiscal fourth quarter that ended in June, driven by a 10% decline in revenue in the news and information segment, which accounts for roughly two-thirds of News Corp’s total revenue. The company posted a loss of $379 million, or 65 cents a share, compared with a profit of $12 million, or 2 cents, a year earlier.

Cost cuts at the news division helped offset the negative impact of foreign currency, a 13% decline in ad revenue and a 5% drop in circulation. At the Journal, circulation revenue rose 7% while ad revenue was up slightly compared with a year earlier. The paper now has 700,000 digital-only subscribers.