News Corp Reports Third Quarter Results for Fiscal 2016

Fiscal 2016 Third Quarter Key Financial Highlights

  • Revenues of $1.9 billion compared to $2.0 billion in the prior year
  • Total Segment EBITDA of $158 million excluding a one-time settlement charge of $280 million; Reported Total Segment EBITDA was ($122) million (which includes the settlement charge)
  • Loss from continuing operations of $128 million, which includes the settlement charge, net of tax, compared to income from continuing operations of $56 million in the prior year
  • Adjusted EPS were $0.04 compared to $0.09 in the prior year – Reported EPS from continuing operations were ($0.26) compared to $0.08 in the prior year
  • Completed the acquisition of iProperty, bolstering the Digital Real Estate Services segment
  • Realtor.com? achieved record traffic with 50 million average monthly unique users this quarter, up 30% versus the prior year, driving robust revenue growth

New York, NY – May 5, 2016 – News Corporation (“News Corp” or the “Company”) (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2016.

Commenting on the results, Chief Executive Robert Thomson said:

“The third quarter results were materially affected by a $280 million pre-tax charge at News America Marketing to resolve a legacy lawsuit and related claims, and continued currency headwinds, which impacted revenues by $72 million and EBITDA by $9 million. Excluding those and other items, revenues and EBITDA declined 5% and 8%, respectively, which was still disappointing. We believe, however, that the company is on track to see improvements in the fourth quarter, with the expansion of our digital real estate business, foreign currency comparisons hopefully beginning to ease, and cost saving initiatives taking firmer root.

Our pursuit of digital growth continues apace and we enhanced our status as the world’s largest digital property company with REA’s completion of the iProperty acquisition in Southeast Asia. Meanwhile, traffic and revenue growth remained robust at REA and realtor.com?. We are particularly focused on driving mobile revenue growth, and are pleased with the results at realtor.com?, where the mobile audience grew close to 50% this quarter, and now represents 60% of page views and the majority of leads.

Despite the difficult conditions for advertising, we saw both Dow Jones and News Corp Australia contributing to Segment EBITDA growth, thanks to an increase in paid digital subscribers, digital advertising growth and ongoing cost reduction to improve efficiency. While we believe in the strength of our print properties, we are also investing energetically in the rapid pursuit of digital which is clearly evident in the transition at Dow Jones. At Dow Jones this quarter, digital accounted for more than 50% of total revenues for the first time, and digital-only subscribers at the Wall Street Journal grew to 893,000, representing nearly 45% of the base. We are building a strong digital platform on top of the WSJ print circulation which today is double the size of its nearest competitor.

With the advertising market in the midst of upheaval, advertisers and agencies are experimenting with their spend. We believe that premium mastheads and audiences are currently undervalued by agencies, some of which are more focused on fashion than function. With Silicon Valley’s demand for quality content more voracious than ever, and advertisers seeking greater digital accountability, we believe News Corp is ideally positioned to capitalize on these macro-trends through the power of its global mastheads and large and growing premium audiences.”

Third Quarter Results from Continuing Operations

The Company reported fiscal 2016 third quarter total revenues of $1.9 billion, a 7% decline as compared to prior year third quarter revenues of $2.0 billion. The decline in total reported revenues includes a negative impact from foreign currency fluctuations of $72 million. Adjusted revenues (which excludes the foreign currency impact and acquisitions as defined in Note 1) declined 5% compared to the prior year, as growth in the Digital Real Estate Services segment was more than offset by lower advertising revenues at the News and Information Services segment, driven primarily by a decline at News America Marketing, and lower consumer revenues at the Book Publishing segment.

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About News Corp
News Corp (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers throughout the world. The company comprises businesses across a range of media, including: news and information services, book publishing, digital real estate services, and cable network programming and pay-TV distribution in Australia. Headquartered in New York, the activities of News Corp are conducted primarily in the United States, Australia, and the United Kingdom. More information: http://www.www.chicfaced.com.

Contacts
News Corp Investor Relations
Michael Florin
212-416-3363
mflorin@www.chicfaced.com

News Corp Corporate Communications
Jim Kennedy
212-416-4064
jkennedy@www.chicfaced.com