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Rupert Murdoch-controlled, News Corporation (NWSA - Free Report) reported profit in second-quarter fiscal 2017 after posting loss in the previous quarter. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate driven by robust performance of digital real-estate and book publishing units. However, the company’s revenues missed the Zacks Consensus Estimate for the second straight quarter primarily due to soft print advertising demand and foreign currency headwinds.
News Corporation registered adjusted earnings of 19 cent a share outpacing the Zacks Consensus Estimate by a penny but declined 5% year over year. Including one-time items, the publisher of The Wall Street Journal and New York Post reported net loss from continuing operations of 50 cents a share compared with earnings of 15 cents posted in the year-ago period.
News Corporation, which split from Twenty-First Century Fox, Inc. (FOXA - Free Report) , stated that its total revenue for the reported quarter was $2,116 million, down 2% from the year-ago quarter and below the Zacks Consensus Estimate of $2,137 million. Adverse foreign currency fluctuations hurt total revenue by $53 million.
The company’s adjusted revenues (excluding the impact of acquisitions, foreign currency fluctuations and divestitures) came in at $2,110 million, reflecting a decline of 1.3% year over year.
Total advertising revenues declined 8.3% to $748 million, while circulation and subscription revenues fell 4.2% to $595 million. Consumer revenues increased 4.9% to $450 million, while revenues from real estate climbed 15.6% to $185 million. Meanwhile, Other revenues gained 2.2% to $138 million.
News Corporation, which offers e-books for devices sold by Amazon.com Inc. (AMZN - Free Report) and Apple Inc. (AAPL - Free Report) , is in a transitional phase, looking to diversify revenue streams, along with expanding digital properties through product launches and accretive acquisitions.
Following the results, the company’s shares gained 1.6% in after-hour trading session yesterday. In fact in the past one year, the stock has performed mostly on par with the Zacks categorized Movie/TV Production/Distribution industry gaining more than 19%.
Segmental Performance
Revenues from the News and Information Services segment declined 7% year over year to $1,303 million in the reported quarter. Adjusted revenues fell 5% from the prior-year period. Advertising revenues decreased 9%, hurt by the adverse impact of foreign currency fluctuations and softness in the print advertising market, partly offset by $22 million from the addition of Wireless Group and increased in-store product revenues at News America Marketing.
Circulation and subscription revenues dipped 5%. However, excluding the impact of foreign currency fluctuations, the figure inched up 1% on account of increase in subscription pricing, selected rise in cover prices in the U.K. and Australia and jump in paid digital subscribers, partly neutralized by fall in print volume. Digital revenues accounted for 27% of segment revenues in the quarter under review compared with 22% in the year-ago period. Adjusted segment EBITDA declined 10% during the quarter to $142 million.
The Book Publishing segment reported revenues of $466 million, up 4% from the prior-year period owing to continued success of backlist titles comprising Hillbilly Elegy by J.D. Vance, and Sarah Young Jesus Always and Jesus Calling. Digital sales which constituted 16% of consumer revenues increased 3% in the quarter. Adjusted revenues for the segment rose 6%. While adjusted EBITDA for News Corporation’s book publishing business surged 35% to $77 million.
Revenues at the Digital Real Estate Services segment advanced 16% year over year to $242 million on the back of sustained growth witnessed across REA Group Limited (up 19%) and Move (up 7%), along with the buyout of iProperty and Diakrit. Adjusted revenues grew 10% in the quarter under review, while adjusted EBITDA increased 31% to $92 million.
The Cable Network Programming segment’s revenues came in at $104 million, down 2% from the year-ago quarter primarily due to decline in affiliate and advertising revenues. Adjusted revenues were down 5%. However, adjusted EBITDA surged 23% year over year to $48 million.
Other Financial Aspects
News Corporation ended the quarter with cash and cash equivalents of $1,564 million, borrowings of $268 million and shareholders’ equity of 10,955 million, excluding non-controlling interest of $273 million.
Capital expenditures of $108 million were incurred during the quarter, while free cash flow available to the company was negative $160 million.
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News Corp (NWSA) Q2 Earnings Top; Soft Ad Market Hurt Sales
Rupert Murdoch-controlled, News Corporation (NWSA - Free Report) reported profit in second-quarter fiscal 2017 after posting loss in the previous quarter. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate driven by robust performance of digital real-estate and book publishing units. However, the company’s revenues missed the Zacks Consensus Estimate for the second straight quarter primarily due to soft print advertising demand and foreign currency headwinds.
News Corporation registered adjusted earnings of 19 cent a share outpacing the Zacks Consensus Estimate by a penny but declined 5% year over year. Including one-time items, the publisher of The Wall Street Journal and New York Post reported net loss from continuing operations of 50 cents a share compared with earnings of 15 cents posted in the year-ago period.
News Corporation, which split from Twenty-First Century Fox, Inc. (FOXA - Free Report) , stated that its total revenue for the reported quarter was $2,116 million, down 2% from the year-ago quarter and below the Zacks Consensus Estimate of $2,137 million. Adverse foreign currency fluctuations hurt total revenue by $53 million.
The company’s adjusted revenues (excluding the impact of acquisitions, foreign currency fluctuations and divestitures) came in at $2,110 million, reflecting a decline of 1.3% year over year.
Total advertising revenues declined 8.3% to $748 million, while circulation and subscription revenues fell 4.2% to $595 million. Consumer revenues increased 4.9% to $450 million, while revenues from real estate climbed 15.6% to $185 million. Meanwhile, Other revenues gained 2.2% to $138 million.
News Corporation, which offers e-books for devices sold by Amazon.com Inc. (AMZN - Free Report) and Apple Inc. (AAPL - Free Report) , is in a transitional phase, looking to diversify revenue streams, along with expanding digital properties through product launches and accretive acquisitions.
Following the results, the company’s shares gained 1.6% in after-hour trading session yesterday. In fact in the past one year, the stock has performed mostly on par with the Zacks categorized Movie/TV Production/Distribution industry gaining more than 19%.
Segmental Performance
Revenues from the News and Information Services segment declined 7% year over year to $1,303 million in the reported quarter. Adjusted revenues fell 5% from the prior-year period. Advertising revenues decreased 9%, hurt by the adverse impact of foreign currency fluctuations and softness in the print advertising market, partly offset by $22 million from the addition of Wireless Group and increased in-store product revenues at News America Marketing.
Circulation and subscription revenues dipped 5%. However, excluding the impact of foreign currency fluctuations, the figure inched up 1% on account of increase in subscription pricing, selected rise in cover prices in the U.K. and Australia and jump in paid digital subscribers, partly neutralized by fall in print volume. Digital revenues accounted for 27% of segment revenues in the quarter under review compared with 22% in the year-ago period. Adjusted segment EBITDA declined 10% during the quarter to $142 million.
The Book Publishing segment reported revenues of $466 million, up 4% from the prior-year period owing to continued success of backlist titles comprising Hillbilly Elegy by J.D. Vance, and Sarah Young Jesus Always and Jesus Calling. Digital sales which constituted 16% of consumer revenues increased 3% in the quarter. Adjusted revenues for the segment rose 6%. While adjusted EBITDA for News Corporation’s book publishing business surged 35% to $77 million.
Revenues at the Digital Real Estate Services segment advanced 16% year over year to $242 million on the back of sustained growth witnessed across REA Group Limited (up 19%) and Move (up 7%), along with the buyout of iProperty and Diakrit. Adjusted revenues grew 10% in the quarter under review, while adjusted EBITDA increased 31% to $92 million.
The Cable Network Programming segment’s revenues came in at $104 million, down 2% from the year-ago quarter primarily due to decline in affiliate and advertising revenues. Adjusted revenues were down 5%. However, adjusted EBITDA surged 23% year over year to $48 million.
Other Financial Aspects
News Corporation ended the quarter with cash and cash equivalents of $1,564 million, borrowings of $268 million and shareholders’ equity of 10,955 million, excluding non-controlling interest of $273 million.
Capital expenditures of $108 million were incurred during the quarter, while free cash flow available to the company was negative $160 million.
News Corporation carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>