News Corp Reports Fourth Quarter and Full Year Results for Fiscal 2016

Fiscal 2016 Fourth Quarter Key Financial Highlights

  • Revenues of $2.2 billion increased 5% compared to $2.1 billion in the prior year
  • Income from continuing operations of $114 million compared to $20 million in the prior year
  • Total Segment EBITDA of $361 million, which includes a one-time litigation settlement gain of $122 million, compared to $215 million in the prior year
  • EPS were $0.16 including the settlement gain, compared to $0.01 in the prior year
  • Digital Real Estate Services segment revenue grew 21% compared to the prior year
  • Digital revenues represented 23% of News and Information Services segment revenues, compared to 19% in the prior year

New York, NY – August 8, 2016 – News Corporation (“News Corp” or the “Company”) (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months and fiscal year ended June 30, 2016 (includes 14 and 53 weeks, respectively, compared to 13 and 52 weeks in the three months and fiscal year ended June 30, 2015, respectively).

Commenting on the results, Chief Executive Robert Thomson said:

“We ended Fiscal Year 2016 with strong results in the fourth quarter, highlighted by robust year-over-year growth in revenues and EBITDA at Digital Real Estate Services and an upturn at HarperCollins.

Over the past year, we made clear progress on our primary goals – to become more digital and more global. Since the advent of the new News three years ago, revenue at Digital Real Estate Services has more than doubled, and it is expected to become the biggest contributor to EBITDA in the future thanks to the ongoing success of REA and the rapid growth at Realtor.com? in the U.S. Our reach in digital real estate is unparalleled and highlights the potential of the News Corp network, which is monetizing shared data and maximizing the value of content and traffic.

Book Publishing ended the year strongly, highlighting our ability to leverage quality content across both print and digital platforms.

While global print ad trends remain challenging at our News and Information Services segment, we are continuing our aggressive growth in digital, which now accounts for 23% of segment revenues, up from 19% last year.

The success of the Wall Street Journal is a testament to the importance of high quality content with global appeal. This past quarter the WSJ reached 948,000 digital-only subscribers, posting healthy year-over-year gains with improved pricing to better reflect its unique value. At News UK, The Times and The Sunday Times continue to impress with nearly 182,500 digital-only subscribers. Digital subscriptions continue to grow and now account for approximately 45% of the subscriber base, while print sales have also risen tangibly in recent months. This quarter we relaunched the Sun’s website, which had over 42 million global unique users in June, a distinctive increase since the lifting of the paywall last year. The U.K. team is focused on leveraging our immensely valuable U.K. brands, which is part of the logic behind our offer for Wireless Group. Finally, at News Australia, The Australian continues to post higher paid volume, thanks to digital.

With the advertising marketplace in upheaval and, rightly under increased scrutiny, we believe the need for trusted content and premium audiences will only increase. We are confident that News Corp’s unique portfolio and global distribution, combined with our focus on cost efficiencies, mean we are uniquely positioned to capitalize on broader social and commercial trends, and drive long-term value for investors.”

Fourth Quarter Results from Continuing Operations

The Company reported fiscal 2016 fourth quarter total revenues of $2.2 billion, a 5% increase as compared to the prior year fourth quarter revenues of $2.1 billion. Reported revenues reflect a negative impact from foreign currency fluctuations of $54 million. Adjusted Revenues (which exclude the foreign currency impact and acquisitions as defined in Note 1) increased 6% compared to the prior year, as growth in the Digital Real Estate Services and Book Publishing segments and the impact from the additional week in the quarter of $112 million were partially offset by lower advertising revenues at the News and Information Services segment.

Income from continuing operations for the quarter was $114 million as compared to $20 million in the prior year. The increase was primarily due to a one-time gain of $122 million ($75 million, net of tax) related to the settlement of litigation between Move and Zillow Group, lower restructuring charges and higher Total Segment EBITDA, as discussed below, offset in part by lower Other, net.

The Company reported fourth quarter Total Segment EBITDA of $361 million, a 68% increase as compared to $215 million in the prior year. Fourth quarter Total Segment EBITDA includes the gain at Move from the settlement as mentioned above. Excluding this settlement, Total Segment EBITDA in the quarter would have been $239 million.

Adjusted Total Segment EBITDA (as defined in Note 1), which excludes the impact of the settlement noted above as well as the other items described in Note 1, increased 23% compared to the prior year, primarily due to strength at the Book Publishing and Digital Real Estate Services segments and the impact from the additional week in the quarter.

Earnings per share from continuing operations available to News Corporation stockholders were $0.16 as compared to $0.01 in the prior year.

Adjusted EPS (as defined in Note 3) were $0.10 compared to $0.08 in the prior year.

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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