News Corp Reports Second Quarter Results for Fiscal 2017

Fiscal 2017 Second Quarter Key financial Highlights

  • Revenues of $2.12 billion compared to $2.16 billion in the prior year
  • Digital Real Estate Services segment revenue grew 16% compared to the prior year
  • Digital revenues increased to 27% of News and Information Services segment revenues, compared to 22% in the prior year
  • (Loss) income from continuing operations was ($219) million, compared to $106 million in the prior year. The loss includes $537 million of non-cash impairments and write-downs and a one-time gain of $120 million as a result of cash proceeds from the sale of REA Group’s European business
  • Total Segment EBITDA of $325 million compared to $280 million in the prior year
  • Reported EPS were ($0.50) compared to $0.15 in the prior year – Adjusted EPS were $0.19 compared to $0.20 in the prior year

New York, NY – February 9, 2017 – News Corporation (“News Corp” or the “Company”) (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended December 31, 2016.

Commenting on the results, Chief Executive Robert Thomson said:

“In the second quarter, we saw the efficacy of our strategic reinvestment and digital diversification. Both were evident in our significantly increased operating profitability in the quarter, despite continued headwinds in print advertising. Results were driven by strong performance at our Digital Real Estate Services segment and meaningful revenues at HarperCollins, along with appropriate and ongoing management of the cost base at our news mastheads.

Our core platform has been bolstered by our rapid expansion in digital real estate, which is well on the way to becoming the largest contributor to our profitability. This segment posted another very strong quarter, with a 16% year-over-year revenue increase, improved margins and robust audience gains.

This quarter’s results were impacted by non-cash charges because of a change in the carrying value of Foxtel and an impairment of the print-related fixed assets at our Australian newspaper business.

In News and Information Services, we are assertively transitioning to digital, now accounting for 27% of segment revenues, up from 22%. We are especially confident in the value of our news brands, given growing consumer demand for accurate and timely journalism. In fact, the Wall Street Journal now has over 2.1 million paid subscribers and, for the first time, more than 50% of those subscribers are digital.

Audiences are craving integrity, which is why so many of our mastheads have reported strong growth in readers and subscribers this quarter. And advertisers need a trusted canvas and real results, not the muddled, muddied metrics of many digital platforms.”

SECOND QUARTER RESULTS

The Company reported fiscal 2017 second quarter total revenues of $2.12 billion, compared to $2.16 billion in the prior year period. Reported revenues reflect a negative impact from foreign currency fluctuations of $53 million. Adjusted Revenues (which exclude the foreign currency impact and acquisitions and divestitures as defined in Note 1) decreased 1% compared to the prior year, as growth in the Digital Real Estate Services and Book Publishing segments was more than offset by lower advertising revenues at the News and Information Services segment.

(Loss) income from continuing operations for the quarter was ($219) million as compared to $106 million in the prior year. The current year’s quarter includes a pre-tax non-cash impairment charge of $310 million, primarily related to the write-down of the fixed assets at the Australian newspapers, and lower equity earnings of affiliates, primarily driven by a $227 million pre-tax non-cash write-down related to the adjustment of the carrying value of the Company’s investment in Foxtel to fair value. The aggregate tax benefit on the impairment and write-down was $121 million. These charges were partially offset by a gain of $120 million ($103 million, net of tax) from the sale of REA Group’s European businesses and higher Total Segment EBITDA, as discussed below.

The Company reported second quarter Total Segment EBITDA of $325 million, compared to $280 million in the prior year. Adjusted Total Segment EBITDA (as defined in Note 1) was 14% higher compared to the prior year, primarily due to the continued growth in the Digital Real Estate Services and Book Publishing segments and lower programming rights costs at the Cable Network Programming segment.

(Loss) income per share from continuing operations available to News Corporation stockholders was ($0.50) as compared to $0.15 in the prior year.

Adjusted EPS (as defined in Note 3) were $0.19 compared to $0.20 in the prior year.

Please click here for the full Earnings Release information

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About News Corp
News Corp (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers throughout the world. The company comprises businesses across a range of media, including: news and information services, book publishing, digital real estate services, and cable network programming and pay-TV distribution in Australia. Headquartered in New York, the activities of News Corp are conducted primarily in the United States, Australia, and the United Kingdom. More information: http://www.www.5kungan.com.

Contacts
News Corp Investor Relations
Michael Florin
212-416-3363
mflorin@www.5kungan.com

News Corp Corporate Communications
Jim Kennedy
212-416-4064
jkennedy@www.5kungan.com