News Corp continues its run of ‘profitable quarters’ in Q1 FY2022

US and ASX-listed News Corporation (News Corp) has reported a jump in revenues to US$2.50 billion, an 18% increase compared to $2.12 billion in the prior year, and a net income of US$267 million, up from US$47 million in the prior year, for the three months ended 30 September 2021.

The stellar results for the media company follow a string of profitable quarters.

Chief executive Robert Thomson said: “I am pleased to report that the first quarter of Fiscal 2022 was the most profitable of its kind since the re-launch of News Corp in 2013, building on the trends evident in the last financial year.

“Digital Real Estate Services was again a source of express growth, with both REA Group and Move benefiting from robust yield growth, increased audience and expansion into adjacencies. HarperCollins is thriving, driven by strong sales and the successful integration of HMH. News Media was an especially notable contributor to profitability this quarter, thanks to significant digital advertising growth and our groundbreaking agreements with Google and Facebook.

“We are primed to capitalise on the patent success of the Foxtel streaming strategy, which was highlighted during the Foxtel Strategy Day, and are reviewing potential permutations to maximize shareholder value and growth. It’s worth noting that Subscription Video Services Segment EBITDA rose an impressive 46% in the first quarter.

Source: News Corporation Financial Results Q1 FY 2022

Following board approval of a US$1 billion stock repurchase program, we expect to begin executing on that program after our quiet period ends next week. These strong results underpin our confidence, our resilience, our ability to generate cash for our investors, and our potential for continued growth.”

News Media segment revenues grew 18%, US$89 million, benefiting from the rebound in the advertising market, strong digital subscriber gains and new content licensing revenues from recent news payment agreements with major tech platforms.

Within the segment, revenues at News UK and News Corp Australia increased 18% and 14%, respectively. Wireless Group and the New York Post also saw higher revenues in the quarter. Adjusted Revenues for the segment increased 13% compared to the prior year.

Circulation and subscription revenues increased $39 million, or 16%, compared to the prior year, primarily due to a $13 million, or 5%, positive impact from foreign currency fluctuations, digital subscriber growth, higher content licensing revenues and cover price increases.

Advertising revenues increased $39 million, or 21%, compared to the prior year, driven by growth in digital advertising across the businesses, recovery of print advertising at News UK and a $9 million, or 5%, positive impact from foreign currency fluctuations.

However, it was noted that Australia had a “continued weakness in the print advertising market,” exacerbated by the recent COVID-19 related restrictions across key states.

Digital revenues represented 33% of News Media segment revenues in the quarter, compared to 28% in the prior year, and represented 30% of the combined revenues of the newspaper mastheads.

According to internal data, digital  subscribers at News Corp Australia for the period totalled 897,000 (850,000 for news mastheads), compared to 727,000 (685,000 for news mastheads) in the prior year.

Subscription Video Services Segment EBITDA grew 46% as Foxtel’s streaming products reached approximately 2.1 million paid subscribers, up 69% compared to the prior year Foxtel’s capital expenditures for the three months ended September 30, 2021 were US$48 million, compared to US$51 million in the prior year.

Dow Jones saw its highest first quarter revenue and profitability since its acquisition, while the Book Publishing segment revenues grew 19%, benefiting from the HMH acquisition and continued strong consumption patterns.

News Corp Australia’s share price was at A$31.7 at the time of publishing, with a market capitalisation value of A$18.79 billion.


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