News Corp confirms 5% cut to global workforce, Q3 FY results down 2% YoY

News Corporation has posted another drop in revenue in its third-quarter results for the 2023 financial year. Revenue for the quarter was US$2.45 billion (A$3.65 billion), a 2% decrease compared to the prior financial year period.

The media business has said the drop reflected a US$98 million (A$146 million) or 4% negative impact in foreign currency fluctuations.

Net income for the three months ending March 31 2023 was US$59 million (A$88 million), in a significant fall from the US$104 million (A$155 million) reported in the prior year.

Once again, the quarterly revenue of all segments saw a decline except for Dow Jones, which posted an 9% year-on-year (YoY) increase.

Total segment EBITDA was US$320 million (A$477 million), down 11% from US$358 million (A$534 million) the previous year. The Dow Jones was again the only segment that saw an increase, up 24% to US$109 million (A$163 million)


Segment Breakdown [click to enlarge]

For the News Media segment, the total advertising revenue decreased by US$11 million (A$16 million), or 5% YoY, partially attributed to lower digital advertising at News Corp Australia and low print advertising at New UK. News Corp Australia’s relevant operations saw a 5% decrease in total revenue. Closing digital subscribers at News Corp Australia as of 31 March 2023 were 1.043 million (937,000 for news mastheads), compared to 946,000 (876,000 for news mastheads) in the prior year.

The 5% revenue decrease was an impact of foreign currency fluctuations, as on a constant currency basis, revenue increase 1%.

In Digital Real Estate Services, REA Group posted a US$24 million (A$36 million), or 10% decline in revenue, partially due the decline in Australian residential revenues as a result of low national listings in Sydney and Melbourne.

Last month it was reported that News Corp had locally made a number of cuts to its metro, regional and community titles, with the company now confirming a 5% reduction in headcount, which is expected to result in US$160 million (A$239 million) in annualised savings.

Chief executive officer, Robert Thomson, was optimistic about the results, lauding News Corp’s endurance during a difficult period.

“These results demonstrate the fundamental differences in the character of News Corp compared with other media companies. In a period in which advertising was clearly insipid in certain parts of the world, our core non-advertising revenue has been particularly robust, highlighted by a 38 percent increase in revenues at the Doe Jones professional information business.

“Overall, our fiscal third quarter results demonstrated meaningful progress compared to the first half, with various macro and sectoral trends decidedly more positive. Revenue were over $2.4 billion, down only 2 percent from the prior year, but higher in constant currency, while our company-wide cost cutting program began to gain traction.

“That cost reduction drive includes taking the difficult but necessary step of reducing headcount by an expected five percent, and we now anticipate that program will yield at least $160 million in annualized savings by the end of this calendar year.”

News Corp trades at A$24.80 on the ASX as of 12 May, the market cap sits at US$9.66 billion (A$14.4 billion).


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