News Corporation exceeded fiscal second-quarter expectations on Wednesday (Thursday AEDT), driven by strong performances in its digital real estate and book publishing segments.
News Corp reported earnings per share (EPS) of $0.33, surpassing the expected $0.31, while revenues rose 5% year-over-year to US$2.24 billion, exceeding estimates of $2.19 billion.
Growth was primarily driven by higher Australian residential revenues at REA Group, increased book sales in the Book Publishing segment, and higher circulation and subscription revenues at Dow Jones.
REA Group posted record revenue of $343 million, a 17% increase, driven by strong performance in Australian residential real estate.
Dow Jones also recorded its highest-ever revenue of $600 million, supported by an 11% growth in Risk & Compliance and a 10% increase in Dow Jones Energy.
Book Publishing revenue rose 8% in the quarter, with Segment EBITDA up 19%, driven by strong physical and digital book sales.
News Corp also announced the sale of Foxtel to DAZN for an enterprise value of A$3.4 billion, with Foxtel’s results now classified as discontinued operations.
Chief Executive Robert Thomson noted, "The three pillars of growth - Digital Real Estate, Dow Jones, and Book Publishing - continued to expand Segment EBITDA robustly. We also saw the positive impact of rigorous cost discipline and digital development in the News Media segment, and our overall margin rose meaningfully compared to the prior year.
With a keen eye on those core areas of growth, we took a significant step towards simplification with the agreement to sell Foxtel to DAZN, a premier global sports streaming provider, for a total enterprise value of A$3.4 billion. The agreement is tangible recognition of Foxtel’s successful digital transformation, and should surely benefit our shareholders, our partners at DAZN and all Australian sports fans."
Among subscriptions data, Dow Jones consumer products grew 9% year-over-year to over 5.9 million, with digital-only subscriptions rising 13% to over 5.3 million.
Subscriptions to The Wall Street Journal increased 4% to over 4.2 million, with digital-only subscriptions climbing 7% to nearly 3.8 million, now making up 90% of total Wall Street Journal subscriptions.
Despite these gains, news media revenue in the quarter declined by $12 million, or 2%, due to lower third-party printing revenue and decreased advertising revenue.
Advertising revenue fell by $4 million, or 2%, primarily due to a decline in print and digital advertising at News U.K., which was attributed to algorithm changes affecting traffic at some mastheads.
As of December 31, 2024, News Corp Australia’s digital subscribers totalled 1,126,000, up from 1,051,000 in the prior year. The Times and Sunday Times digital subscriptions, including the Times Literary Supplement, reached 616,000, compared to 575,000 a year earlier.
The Sun’s digital audience saw a significant decline, dropping to 70 million global monthly unique users in December 2024 from 143 million the previous year. The New York Post’s digital network also experienced a decrease, falling to 90 million unique users from 124 million in December 2023.
Commenting on the results, Chief Executive Robert Thomson stated: “News Corp had a fruitful quarter, qualitatively and quantitatively. Revenues on a continuing operations basis, which excludes Foxtel, grew 5% to $2.24 billion, net income from continuing operations surged 58% to $306 million and Total Segment EBITDA rose 20% to $478 million.
"We are providing priceless content for Generative AI, and remain vigilant in our pursuit of degenerative AI. We are pleased with our partnership with OpenAI and hope that other companies in the segment take a similarly enlightened approach. Our legal action against the perplexing Perplexity is underway and we look forward with relish to document discovery. The sudden rise of DeepSeek is itself a salutary lesson for all AI players. Data centers, chips, and energy costs aside, we believe DeepSeek lacks the immediacy of trusted news and, ultimately, content will be king in the world of AI.”
At the time of writing, News Corporation (NASDAQ: NWS) stock was trading at US$33.48, up 0.7% from Wednesday's close of $33.24. The stock reached a day low of $32.67 and a day high of $33.3. News Corporation's market cap stands at $17.24 billion.
