Publishing generates much lower profit margins than the company’s TV and film operations, and faces stiff competition from online news outlets.
Industrywide newspaper advertising has fallen about 50% in the past five years, estimates the Newspaper Association of America.
While the Journal has added subscribers, and has protected its content behind a paywall, the new standalone publishing company will confront deep challenges.
‘s entertainment businesses have been driven entirely by its cable channels, such as Fox News and FX.
MrNathanson of Nomura Securities expects the cable networks to have annual revenue growth of 11.1% from 2011 to 2014 andeven faster rises in operating income.
The broadcast TV, satellite TV and film businesses each saw operating profit fall over the same period.
Notably, our Americas Fabrication segment reported positive adjusted operating profit for the first time in the last 10 sequential quarters.
Net earnings for the nine months ended May 31, 2012 of $177.3 million or $1.52 per diluted share on sales of $6.0 billion compares to a net loss of $9.3 million or $0.08 per share on sales of $5.6 billion for the same period last year.
The publishing businesses expected to be spun off saw operating profit fall 26% in that period, estimates Nomura Securities analyst Michael Nathanson.
Amy Unwin is a business journalist based in Sydney, Australia. Amy has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Amy spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.