News Corp (ASX: NWS) has reported its second quarter result of FY19.
News Corp is a global media and information services business. It has news and information services (news.com.au, The Australian, Herald Sun, and other Australian news sources, The Sun, The Times and other UK papers and The Wall Street Journal), subscription video services (Foxtel), book publishing (HarperCollins) and digital real estate services (Move Inc).
News Corp’s Second Quarter Result
News Corp reported that total revenue increased by 21% to US$2.63 billion and segment EBITDA increased by 13% to US$370 million.
Net income improved to a positive US$119 million compared to a net loss of $66 million last year, although the prior year included a $174 million negative impact relating to the US Tax Cuts and Jobs act in the prior year.
That’s why adjusted earnings per share (EPS) actually fell from US$0.24 last year to US$18 this year.
Some of the drivers of the result was the continued weakness in print advertising, although digital advertising did make up for some of the decline. Dow Jones saw a 7% increase of circulation revenues after growth of 23% of paid digital subscribers at The Wall Street Journal.
The inclusion of Foxtel boosted subscription video service revenue and EBITDA by US$442 million and US$51 million respectively. Foxtel subscribers were 2.9 million, higher than the previous year. Kayo Sports now has 115,000 subscribers. Broadcast average revenue per user (ARPU) decreased 3% to AUD$78.
Book publishing saw revenue increase by 6% due to higher sales in general books and Christian publishing.
Digital real estate services revenue increased by 7%, while foreign currency fluctuations had a 4% negative impact.
News Corp decided to declare a half year dividend of US$0.10 per share, which is the same as last year.
News Corp CEO Robert Thomson said: “Although our teams have been diligent in pursuing revenue opportunities, the digital platforms, which arbitrage algorithmic ambiguity, remain dysfunctional. It is clear there has been a regulatory awakening and the time has come for a regulatory reckoning.”
Is News Corp a buy?
News Corp is an interesting business that is globally important for the news and political discussion. However, it seems structurally challenged with some audiences for its publications falling.
One of the main highlights seems to be its REA Group Limited (ASX: REA) holding, but you may as well just buy shares directly.
I don’t think News Corp is a buy today, I’d rather buy one of the proven shares in the free report below.
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