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News Corporation says a previously announced cost-cutting drive will produce bigger savings to its bottom line than previously thought, after net income fell in the latest quarter due to lower earnings in key businesses.
In a third quarter update, the media giant said it now expected to save about $US160 million ($239 million) from cost cuts, up from its previous estimated savings, as earnings before interest, tax, depreciation amortisation (EBITDA) across its segments fell 11 per cent.
News Corp Australia owns a range of local assets, including The Australian, The Herald Sun and The Daily Telegraph.Credit: Rhett Wyman
Chief executive Robert Thomson said revenues across the company fell 2 per cent to $US2.4 billion, mainly because of foreign exchange movements, and this was a better performance than many media businesses when advertising markets were “clearly insipid” in parts of the world. He said a company-wide cost-cutting program was starting to gain traction.
“That cost reduction drive includes taking the difficult but necessary step of reducing headcount by an expected 5 per cent, and we now anticipate that program will yield at least $US160 million in annualised savings by the end of this calendar year,” he said.
The company said net income in the quarter fell 43 per cent to $US59 million, mainly because of lower EBITDA across segments such as its digital real estate businesses, its Australian news operations, Dow Jones and book publishing.
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