Shares of News Corporation [ASX:NWS] are down 5.44% today at time of writing. Shares decreased from $18.40 to $17.39.
Why did the News Corp Share Price Tank?
News Corp published its full year results for fiscal year 2017 today. It reported a loss of US$643 million, compared to a US$235 million gain last year, mainly due to lower newspaper values in Australia and the UK.
The company, which is controlled by Rupert Murdoch, publishes Australian newspapers like The Australian and the Herald Sun, and news site news.com.au
Yet as Chief Executive Robert Thomson said, growing profitability has been coming from the real estate services.
‘Move, the operator of realtor.com and REA Group continue to post record revenues driven by higher traffic and improved yields. Digital real estate overall accounted for nearly 40% of our profits.’
REA Group [ASX:REA] also reported its FY17 results today. It announced a net profit of $206 million, a 19% fall from 2016, when it reported a profit of $252 million. The decrease is mainly due to weakness in the Asian property market.
Shares for REA also slid down 5.49% after the announcement, from $68.42 to $64.33.
Future bleak for News Corp?
As News Corp struggles with low newspaper values, it is becoming increasingly reliant on digital real estate. REA is now moving into home loans in an effort to capture a greater share of the mortgage industry.
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