News Corp not chasing mergers to compete with Nine-Fairfax powerhouse

Mae Love
August 12, 2018

CEO Robert Thomson said the group had gone through a year of "operational and transformational success" and pointed to revenue growth in its Digital Real Estate Services and Book Publishing arms. Analysts had a consensus revenue estimate of $2.68 billion.

Global media giant News Corporation has suffered another nasty full year loss of $US1.4 billion ($1.9 billion) as it continues to write down the value of its Australian pay-TV subsidiary, Foxtel.

In Q4, Digital Real Estate segment revenues increased 20% y-o-y to $299 million, and the segment's EBITDA further grew 14% y-0-y to $99 million, largely due to continued growth at REA Group and Move.

We have created an interactive dashboard on what to expect from News Corp's fiscal 2019 earnings which outline our forecasts for the company's full-year fiscal 2019 results.

Growth includes additional revenue from the consolidation of Foxtel-Fox Sports as part of subscription TV segment. As a effect, the company is focused on driving higher penetration of digital paid subscriptions, particularly in Australia and at News UK in fiscal 2019.

The combination of the Digital Real Estate Services and Subscription Video Services is expected to account for significantly more than half of News Corp profits.

Digital revenues represented 30% of News and Information Services segment revenues, compared to 26% in the prior year, reflecting strong paid digital subscriber growth at mastheads.

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He highlighted the growth of digital paid subscribers at United Kingdom mastheads such as the Times and the Sunday Times, and hailed strong growth at the Wall Street Journal.

For that segment, the company expects "reinvestment this year" that will focus on launching new OTT products, 4K, the next generation of the Foxtel iQ digital set-top box and "managing our valuable broadcast base", she said.

Foxtel's revenues were flat with the positive impact from foreign currency fluctuations offset by falling subscription numbers and lower advertising revenues.

Five years ago News Corp underwent a restructure that saw its entertainment assets spun off into a separate company from its publishing businesses, including Harper Collins.

While reporting News Corp.'s Q2 results in a February 8 earnings call, Thomson pointed out: "Clearly, there are profound changes taking place in the creation and the distribution of digital content".

Advertising revenues declined $76 million, or 3%, while circulation and subscription revenues increased $105 million, or 5%, driven by the factors discussed above in the fourth quarter segment results.

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