Lost in Translation as News Corporation's First-Quarter Earnings Hit by Currency

The 18% decline in News Corporation's first-quarter earnings before interest, tax, depreciation and amortisation, or EBITDA, to USD 170 million (excluding the recently sold digital education unit) was disappointing. However, while we regard currency impact as part and parcel of operating a global conglomerate, the USD 29 million earnings hit in the quarter from a stronger US dollar is too stark to dismiss. Adjusting for this, first-quarter EBITDA would have been down just 4%--a commendable performance in light of a litany of challenges during the period (weak newspaper advertising conditions in Australia and the United Kingdom, tough prior-year comparisons for the books division, an uneven global economy).