News Corporation has seen a 5 per cent increase in revenues in its first fiscal quarter, rising to $2.06 billion. This positive growth was also reflected in the Australian market, where revenues grew 4 percent.
The growth has was largely attributed to the Digital Real Estate Services segment, with REA Group finding strong growth in Australia due to increased residential depth revenue. Other key growth areas included the acquisitions of Australian Regional Media and Wireless Group plc and a $26 million positive impact from foreign currency fluctuations.,
News Corporation CEO Robert Thomson said the company’s commitment to journalism drove the positive financial outlook.
“We have reason for optimism about the future of our premium media businesses, in light of the profound changes agreed by Google in the ranking of news content. These changes follow almost a decade of campaigning by News Corp, which led the world in understanding the threat to and the opportunities for quality journalism in the digital age,” he said.
“We are continuing our discussions with both Google and Facebook about further facilitating subscriptions and the sharing of permissioned personal data. And we look forward to serving our advertisers with data that is reliable, not risible.”
Other key takeaways from the results included:
- Net income was $87 million compared to nil in the prior year
- Total Segment EBITDA was $249 million compared to $130 million in the prior year
- Reported revenue and Segment EBITDA growth in every segment
- Reported EPS were $0.12 compared to ($0.03) in the prior year – Adjusted EPS were $0.07 compared to ($0.01) in the prior year
- Digital revenues represented 27 per cent of News and Information Services segment revenues, compared to 24 per cent in the prior year
In the News and Information Services segment, revenues in the quarter increased by 2 per cent ($19 million), while overall circulation and subscription revenues increased 3 per cent. In Australia digital subscribers to News Corp mastheads increased by 92 300 to a total of 375,400 in September 2017, compared to 283,100 in the prior year.
The Cable Network Programming segment increased by 13 per cent to 17 million due to the acquisition of Australian News Channel Pty Ltd, broadcaster of Sky News and its affiliates.
Mr Thomson used the result announcement to further comment on the proposed Foxtel/ Fox Sports merger.
“In August, we and Telstra announced a non-binding agreement to combine Foxtel and FOX SPORTS Australia, with News Corp owning 65 per cent of the new company. Pending definitive documentation and regulatory approval, we expect to close in the first half of calendar year 2018. The combined company, with majority control by News Corp, is expected to fundamentally transform our revenue and EBITDA profile, and increase the relative share of digital subscription businesses.”