- November 7, 2020
- Posted by: Stratford Team
- Category: Business
Shares of News Corp. surged 10 percent on Friday after the publishing giant said it swung to profit with better-than-expected quarterly results.
The parent of the New York Post and the Wall Street Journal posted a fiscal first-quarter profit of 8 cents a share on an adjusted basis, up from 4 cents a share this time last year, after posting a loss in the previous quarter due to the pandemic.
Revenue came in at $2.1 billion, down 10 percent year-over-year. But some of the decline was attributed to a loss of income from News American Marketing, the coupon publishing unit that was sold at the end of March for $235 million. The adjusted revenue decline was 3 percent.
The results follow a difficult period for media companies generally, which saw spending plunge due to the pandemic, and beat the Zacks’ consensus estimate for earnings of 4 cents a share on sales of $1.9 billion.
News Corp. reported total segment EBIDTA of $268 million, up 21 percent over last year. The growth was spurred by strong sales from its Dow Jones, digital real estate and book publishing units.
“News Corp has started the fiscal year strongly, with higher revenue in many of our segments during the first quarter, and a 21 percent increase year-on-year in profitability, despite the disruptive economic consequences of COVID-19,” said CEO Robert Thomson.
The stock rose 8.3 percent to close at $15.16 a share.
The company’s Dow Jones unit, parent of the Wall Street Journal, grew adjusted earnings by 47 percent, driven by record average consumer product subscriptions of 3.88 million.
The company’s digital real estate services segment grew 45 percent on record revenue with profit contributions by Move, the operator of realtor.com.
Book publishing unit Harper Collins reported a 13 percent rise in revenue and 45 percent increase in EBITDA.
“It is clear that the digital landscape is changing fundamentally, and the company has been an important catalyst for that change,” said Thomson. “The principle of a premium for premium content is now recognized, and there will inevitably be further developments in algorithmic transparency and the digital advertising market, two areas in which News Corp has been a leading advocate.”