2023-08-10 16:30:55 ET
News Corp. ( NASDAQ: NWSA ) rose in immediate postmarket trading after posting fiscal fourth-quarter earnings where revenues dipped more than expected, though the company's adjusted profitability rose thanks for the most part to its Dow Jones unit.
Revenues overall fell 9% to $2.43B, vs. expectations for a 7% decline. The company noted the absence of a 4% benefit (about $110M) in the prior-year quarter, as well as 3% negative impact from currency fluctuations.
The decline was led by drops in Book Publishing revenues as well as declines in Digital Real Estate Services, partly offset by constant-currency improvement at Subscription Video Services.
The company also swung to a net loss on a GAAP basis, of $32M vs. a year-ago gain of $127M, thanks in large part to the absence of a $149M prior-year tax benefit. Earnings before interest, taxes, depreciation and amortization, thoguh, rose 8% to $341M, which it attributed to cost savings across its business (including headcount reductions).
In operating metrics, total consumer subscriptions rose 7% to 5.242M. Of those, digital-only subscriptions rose 12% to 4.51M.
And breaking that down further, total subscriptions to The Wall Street Journal rose 6% to 3.966M (and WSJ digital-only subs rose 10% to 3.406M). Total subs to Barron's rose 13% to 1.168M (digital-only subs to Barron's rose 20%, to 1.018M).
"News Corp.'s Fiscal 2023 results highlighted the durability and depth of our revenue streams and the impact of stringent cost controls as we navigated challenging macro conditions, supply chain pressures and currency headwinds," said CEO Robert Thomson.
"Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters," he added.
For the first-time, full-year revenues were more than 50% digital, he noted, and expects the dawn of artificial intelligence to build momentum there on new revenue streams and cost-cutting: "We are already in active negotiations to establish a value for our unique content sets and IP that will play a crucial role in the future of AI."
And Dow Jones prosted its best quarterly and full-year profitability since News Corp. acquired it, he said.
Revenue by segment: Digital Real Estate Services, $369M (down 17%); Subscription Video Services, $501M (down 4%); Dow Jones, $546M (down 3%); Book Publishing, $446M (down 13%); News Media, $571M (down 9%).
EBITDA by segment: Digital Real Estate Services, $108M (down 11%); Subscription Video Services, $78M (down 4%); Dow Jones, $133M (up 25%); Book Publishing, $16M (down 66%); News Media, $45M (up 36%).
Conference call to come at 5 p.m. ET .
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News Corp. gains as Dow Jones profit shines, despite revenue dip