News Corp (NWS) Q4 2016 earnings summary

Executive summary

• FY2016 revenue fell 3% to $8.292B; adjusted revenue was flat excluding FX, acquisitions and divestitures. Total Segment EBITDA declined 28% to $684M, while adjusted Total Segment EBITDA declined 4%.

• Q4 showed stronger momentum in Digital Real Estate Services and Book Publishing, with revenue growth of 21% and 11%, respectively.

• Strategy centered on digital, global and diversified growth, cost control, premium content, mobile and video distribution, and selective acquisitions.

Financial highlights

• FY2016 revenue was $8.292B versus $8.524B in FY2015; advertising revenue declined 5% to $3.644B, while circulation and subscription revenue declined 1% to $2.569B.

• Net income attributable to shareholders was $179M versus a $147M loss; diluted EPS was $0.30 versus a loss of $0.26. Continuing-operations income was $235M versus $367M.

• Total Segment EBITDA was $684M versus $945M; excluding one-time NAM litigation costs and the Zillow settlement gain, adjusted Total Segment EBITDA declined 4%.

• Net cash from continuing operations was $952M; free cash flow available was $610M versus $595M in FY2015.

Outlook and guidance

• Priorities included expanding digital, mobile and video offerings, connecting audience data across platforms, improving operating efficiencies and pursuing acquisitions that support diversification and growth.

• Fiscal 2017 advertising trends were expected to remain more positive at FOX SPORTS Australia than across the industry; continued digital expansion and cost reductions were planned for News and Information Services.

• realtor.com® profitability was targeted to build in 2017 and beyond, alongside continued investment; Checkout 51 aimed to reach 10M users by the end of calendar 2016.