News Corp Reports Second Quarter Results for Fiscal 2020
Fiscal 2020 Second Quarter Key Financial Highlights
- Revenues were $2.48 billion, a 6% decline compared to $2.63 billion in the prior year
- Net income was $103 million compared to $119 million in the prior year
- Total Segment EBITDA was $355 million compared to $370 million in the prior year
- Reported diluted EPS were $0.14 compared to $0.16 in the prior year – Adjusted EPS were $0.18, flat with the prior year
- Completed the sale of Unruly to Tremor International in January
- Dow Jones results reflected 17% growth in digital-only subscribers, continued strength in Risk and Compliance
- News UK saw growth in advertising revenues and contributed to strong Segment EBITDA growth at the News and Information Services segment
- Profitability contribution from Move, operator of realtor.com?, increased while the referral model continues to show promising signs with improvement in close rates and other key metrics
New York, NY – February 6, 2020 – News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended December 31, 2019.
Commenting on the results, Chief Executive Robert Thomson said:
“In the second quarter of Fiscal 2020, News Corp saw growth at several of our news businesses and an increased profit contribution from Move, operator of realtor.com?. The results were affected by a sluggish Australian economy, uncharacteristic softness in book publishing, and foreign exchange fluctuations. We expect improvement in the second half as real estate markets show signs of gradual recovery, Dow Jones benefits from new content licensing arrangements and higher digital subscribers, and HarperCollins capitalizes on an exciting slate of new releases.
Our News and Information Services segment posted notably higher profitability driven by a strong increase at News UK as well as continued growth at Dow Jones, where consumer subscriptions recently reached a record 3.5 million, including two million digital-only subscribers at The Wall Street Journal. I would particularly like to highlight the Risk and Compliance business, which is flourishing, with over 20 percent revenue growth for the twelfth consecutive quarter. Client companies are wisely seeking to minimize risk and maximize compliance.
We are seeing significant progress in our long battle for equitable treatment from the dominant tech platforms, and our deals with Apple and Facebook are beginning to yield financial dividends. The Company took important steps on the path toward simplification with the sale of Unruly, the ad tech business, while we are engaged in negotiations for the sale of News America Marketing. We believe that increasing investor focus on the core growth sectors, whether Risk and Compliance or Digital Real Estate, will be to the advantage of our shareholders.”
Second Quarter Results
The Company reported fiscal 2020 second quarter total revenues of $2.48 billion, 6% lower compared to $2.63 billion in the prior year period. The decline reflects a $50 million, or 2%, negative impact from foreign currency fluctuations. The rest of the decline primarily reflects the difficult prior year comparison at the Book Publishing segment, lower subscription revenues at Foxtel, lower print-related advertising revenues at the News and Information Services segment and continued pressure at REA Group due to challenges in the Australian housing market. The declines were partially offset by continued growth in circulation and subscription revenues at the News and Information Services segment. Adjusted Revenues (which exclude the foreign currency impact, acquisitions and divestitures as defined in Note 2) declined 4%.
Net income for the quarter was $103 million, a 13% decline compared to $119 million in the prior year, primarily reflecting lower Total Segment EBITDA, as discussed below.
The Company reported second quarter Total Segment EBITDA of $355 million, a 4% decline compared to $370 million in the prior year, primarily reflecting lower revenues, as discussed above, and a $10 million, or 3%, negative impact from foreign currency fluctuations. Adjusted Total Segment EBITDA (as defined in Note 2) decreased 3%.
Diluted net income per share attributable to News Corporation stockholders was $0.14 as compared to $0.16 in the prior year.
Adjusted EPS (as defined in Note 3) were $0.18, flat with the prior year.
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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 and other products and services. The company comprises businesses across a range of media, including: news and information services, subscription video services in Australia, book publishing and digital real estate services. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: http://www.www.5kungan.com.
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