News Corp Reports Second Quarter Results for Fiscal 2019
Fiscal 2019 Second Quarter Key Financial Highlights
- Revenues of $2.63 billion, a 21% increase compared to $2.18 billion in the prior year, reflecting the consolidation of Foxtel and continued strength at the Book Publishing and Digital Real Estate Services segments
- Net income was $119 million compared to a net loss of ($66) million, which included a $174 million negative impact related to the U.S. Tax Cuts and Jobs Act in the prior year
- Total Segment EBITDA was $370 million compared to $328 million in the prior year
- Reported EPS were $0.16 compared to ($0.14) in the prior year – Adjusted EPS were $0.18 compared to $0.24 in the prior year
- Continued revenue improvement at Dow Jones driven by record digital advertising revenues and acceleration in digital paid subscriber growth
- Digital Real Estate Services segment reported strong revenue growth supported by continued product innovation, higher yields and expansion into new revenue streams
- HarperCollins achieved record revenue and Segment EBITDA in the quarter
- Launched Kayo Sports, a sports-only streaming service, in Australia
New York, NY – February 7, 2019 – News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended December 31, 2018.
Commenting on the results, Chief Executive Robert Thomson said:
“News Corp has reported increased profitability and revenue growth during the first half of Fiscal 2019, highlighting the power of premium content and authenticated audiences in a fact-challenged world that craves credibility.
For the second quarter, the Company saw 21% revenue growth and a 13% rise in profitability, reflecting the consolidation of Foxtel and a healthy expansion of revenues in the Book Publishing and Digital Real Estate Services segments.
At News and Information Services, we saw a continuation of positive trends in paid digital subscriptions, including accelerating gains at The Wall Street Journal, and stronger digital advertising revenues in both the U.S. and Australia.
Although our teams have been diligent in pursuing revenue opportunities, the digital platforms, which arbitrage algorithmic ambiguity, remain dysfunctional. It is clear that there has been a regulatory awakening and the time has come for a regulatory reckoning.
At our Digital Real Estate Services segment, despite sluggishness in the U.S. property market, Move delivered another quarter of double-digit revenue growth, driven by product innovation at realtor.com? and the acquisition of Opcity, a strategically important asset that will provide higher quality, value-added leads for brokers.
Within our Subscription Video Services segment, this quarter we launched Kayo Sports, a sports-only OTT product, to positive reviews, and we look forward, with confidence, to the peak selling season for the most popular winter sports in Australia.
Finally, HarperCollins had another outstanding quarter, benefiting from best-in-class content and the burgeoning of digital audio.”
Second Quarter Results
The Company reported fiscal 2019 second quarter total revenues of $2.63 billion, a 21% increase compared to $2.18 billion in the prior year period. The growth reflects the impact from the consolidation of Foxtel’s results following the combination of Foxtel and FOX SPORTS Australia (the “Transaction”) into a new company (“new Foxtel”) and continued strong performances at the Book Publishing and Digital Real Estate Services segments, partially offset by lower print advertising revenues at the News and Information Services segment. The results also include a $67 million negative impact from foreign currency fluctuations and $20 million of lower revenues as a result of the adoption of the new revenue recognition standard. Adjusted Revenues (which exclude the foreign currency impact and acquisitions and divestitures as defined in Note 1) increased 3%.
Net income for the quarter was $119 million compared to a net loss of ($66) million in the prior year, reflecting the absence of the $174 million negative impact of the U.S. Tax Cuts and Jobs Act recognized in the second quarter of fiscal 2018, higher Total Segment EBITDA, as discussed below, and higher Other, net, partially offset by higher depreciation and amortization expense and interest expense as a result of the Transaction.
The Company reported second quarter Total Segment EBITDA of $370 million, a 13% increase compared to $328 million in the prior year, also reflecting the Transaction. Adjusted Total Segment EBITDA (as defined in Note 1) increased 2% as continued strength in the Book Publishing and Digital Real Estate Services segments was partially offset by lower contribution from the News and Information Services segment.
Net income per share available to News Corporation stockholders was $0.16 as compared to a net loss per share of ($0.14) in the prior year.
Adjusted EPS (as defined in Note 3) were $0.18 compared to $0.24 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. The company comprises businesses across a range of media, including: news and information services, book publishing, digital real estate services and subscription video services in Australia. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content is distributed and consumed worldwide. More information is available at: http://www.www.chicfaced.com.
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