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News Corp beat Wall Street’s expectations for adjusted earnings and revenue boosted by growth in digital real estate services and a surge in subscribers at the Wall Street Journal.
Net income from continuing operations in the fiscal third quarter was break-even, compared with a $128m loss in the same quarter last year at the owner of newspapers including The Sun and The Times.
Adjusted earnings rose to 7 cents a share from 4 cents a year ago, ahead of analysts’ estimates of 5 cents. Revenue rose 5 per cent to $1.98bn, ahead of an expected $1.87bn.
“In the third quarter, we saw particular progress in our quest to be more digital and global, while there was tangible improvement in operating efficiencies,” said Robert Thomson, chief executive.
The Wall Street Journal added more than 300,000 digital subscribers from a year ago*. The New York Times and CNN have also reported growth in audiences as a broad boost in interest in news that began before last year’s presidential election has continued into the tumultuous start to the Trump presidency.
Sales in the news and information unit, which accounts about 60 per cent of of revenue, rose 3 per cent to $1.26bn. Earnings before interest, taxes, depreciation and amortisation of $123m compared to a $187m loss the year before. Like other newspapers, News Corp’s titles have been hit by eroding demand for print ads. Print advertising fell in the quarter but declines moderated from steeper decreases in the previous two quarters, the company said. Overall advertising revenue rose 4 per cent.
The company has been cutting costs at Dow Jones, publisher of the Wall Street Journal, including laying off some staff, slimming down the paper and reorganising overseas bureaux. It is targeting $100m in annualised cost savings by June 2018.
News Corp’s investments in digital real estate services continued to pay off, with revenue at the division rising 13 per cent to $219m. Ebitda nearly doubled to $75m.
Revenue at HarperCollins, its book publishing division, rose 4 per cent to $374m, boosted by increased sales of Hidden Figures, which was made into a hit film last year.
*This post has been amended to clarify the the subscriber growth figure.