News Corporation NWSA reported second-quarter fiscal 2025 earnings of 33 cents per share, which matched the Zacks Consensus Estimate and increased 26.92% year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues of $2.24 billion increased 5% year over year and beat the consensus mark by 1.86%. The improvement was driven by growth in the Digital Real Estate Services, Book Publishing and Dow Jones segments.
Following fiscal second-quarter earnings, NWSA shares were up 2.36% in pre-market trading. NWSA shares have gained 4.5% year to date, outperforming the Zacks Consumer Discretionary sector’s return of 2.3%.
NWSA shares have been riding on strategic growth in digital-driven segments and operational efficiency across its key businesses.
News Corporation Price, Consensus and EPS Surprise
Adjusted revenues (which exclude the impact of foreign currency, acquisitions and divestitures) increased 4% year over year.
Total EBITDA increased 20% to $478 million, primarily due to strong contributions from REA Group within the Digital Real Estate Services segment, higher book sales in the Book Publishing segment and higher circulation and subscription revenues in the Dow Jones segment.
NWSA’s Segment Details
Digital Real Estate Services
Revenues in the Digital Real Estate Services segment increased 13% to $473 million, driven by strong performance at REA Group. Adjusted revenues and adjusted segment EBITDA increased 12% and 25%, respectively.
Revenues in Move increased 2% to $130 million, mainly due to strong revenue growth in sellers, new homes and rentals, including the partnership with Zillow, and increased advertising revenues. Representing 78% of total Move revenues, real estate revenues were flat year over year, owing to the continued impact of the macroeconomic environment on the housing market, including higher mortgage rates, which led to lower lead and transaction volumes.
Based on Move’s internal data, the average monthly unique users of Realtor.com’s web and mobile sites fell 6% year over year to 62 million. Lead volume was down 2% year over year, as it continued to be impacted by high mortgage rates and affordability issues.
Revenues at REA Group rose 17% to $343 million, driven by higher Australian residential revenues due to price increases, improved depth penetration, a surge in national listings, a $2 million positive impact from foreign currency fluctuations and increased revenues from REA India.
Australian national residential buy listing volumes in the reported quarter increased 4% year over year, with listings in Sydney and Melbourne each up by 2%.
Foxtel Sale
In the second quarter of fiscal 2025, NWSA entered into an agreement to sell Foxtel to DAZN Group for A$3.4 billion in enterprise value. Foxtel’s shareholder loans will be repaid in cash, and NWSA will gain a 6% equity stake in DAZN and a board seat. Telstra will also be selling its Foxtel stake. The deal, pending approvals is expected to close in the second half of fiscal 2025.
Foxtel’s assets are now classified as held for sale, with its operations reclassified as discontinued, and Subscription Video Services merged into the News Media segment.
Dow Jones
Revenues at the Dow Jones segment increased 3% year over year to $600 million, driven by an increase in the professional information business, higher circulation revenues and higher content licensing revenues. Digital revenues at Dow Jones in the fiscal second quarter represented 81% of total revenues compared with 78% in the year-ago quarter. Adjusted revenues rose 3%.
Circulation and subscription revenues rose 5%, primarily driven by a 4% increase in professional information business revenues, led by 11% growth in Risk & Compliance revenues to $80 million and a jump of 10% in Dow Jones Energy revenues to $68 million.
Circulation revenues inched up 3% year over year due to the continued growth in digital-only subscriptions but were offset by lower print volume. Digital circulation revenues accounted for 73% of circulation revenues for the quarter compared with 70% in the year-ago quarter.
Advertising revenues decreased 4%, primarily due to a 10% decline in print advertising revenues and flat digital advertising revenues. Digital advertising accounted for 64% of total advertising revenues compared to 62% in the prior-year quarter.
During the fiscal second quarter, total average subscriptions to Dow Jones’ consumer products were above 5.9 million, representing a 9% increase compared with the year-ago quarter. Digital-only subscriptions to Dow Jones’ consumer products grew 13%.
Total subscriptions to The Wall Street Journal grew 4% year over year to over 4.2 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 7% to nearly 3.8 million average subscriptions and represented 90% of its total subscriptions.
Book Publishing
The Book Publishing segment reported revenues of $595 million, which increased 8% year over year from the prior-year quarter’s level, primarily due to higher physical and digital book sales.
Key titles in the quarter included Cher: The Memoir by Cher and Wicked by Gregory Maguire. Digital sales rose 9% year over year, driven by a 13% increase in audiobook sales, which benefited from the continued contribution from the Spotify partnership and strong market conditions, as well as a 6% year-over-year increase in e-book sales. Digital sales represented 21% of Consumer revenues for both the reported quarter and the prior-year period. Backlist sales represented approximately 61% of Consumer revenues in the quarter compared with 60% in the prior-year quarter.
News Media
Revenues in the News Media segment fell 2% to $570 million, primarily due to lower revenues from the transfer of third-party printing revenue contracts to News UK and DMG’s joint venture, as well as low advertising revenues. Adjusted revenues for the segment decreased 3% compared with the year-ago quarter.
Within the segment, revenues at News Corp Australia decreased 1% due to lower circulation revenues. News UK decreased 5% year over year due to lower advertising revenues.Circulation and subscription revenues were flat compared to the prior year, primarily due to lower print volumes partially offset by the cover price increases.
Advertising revenues decreased 2% compared with the prior year, primarily due to lower print advertising revenues and lower digital advertising revenues at News UK, mainly driven by a decline in traffic at some mastheads due to algorithm changes at certain platforms.
Digital revenues represented 39% of News Media segment revenues in the fiscal second quarter compared with 37% in the prior-year quarter and represented 37% of the combined revenues of the newspaper mastheads.
As of Dec. 31, 2024, The Times and Sunday Times had 616K closing digital subscribers, including the Times Literary Supplement, compared with 575K in the year-ago quarter. The New York Post’s digital network reached 90 million unique users in December 2024 compared with 124 million in the prior year. The Sun’s digital offering reached 70 million global monthly unique users in December 2024 compared with 143 million in the prior year.
Other Financial Aspects
News Corporation ended the fiscal second quarter with cash and cash equivalents of $1.75 billion, borrowings of $1.95 billion and stockholder equity of $8.15 billion.
NWSA’s Zacks Rank & Other Stocks to Consider
NWSA currently carries a Zacks Rank #2 (Buy).
Amer Sports AS, Six Flags Entertainment Corporation FUN and Intercontinental Hotels Group IHG are some other top-ranked stocks that investors can consider in the broader sector. AS, FUN and IHG carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Amer Sports have gained 13.8% year to date. AS is set to report fourth-quarter 2024 results on Feb. 25.
Shares of Six Flags Entertainment Corporation have dropped 7.3% year to date. FUN is slated to report fourth-quarter 2024 results on Feb. 27.
Shares of Intercontinental Hotels Group have lost 7.1% year to date. IHG is set to report fourth-quarter 2024 results on Feb. 18.
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