News Corp (NWS) Q4 2018 earnings summary

Executive summary

• FY18 revenue rose 11% to $9.024B and Total Segment EBITDA reached a record $1.072B; reported net loss attributable to shareholders widened to $1.514B.

• Foxtel and FOX SPORTS Australia combined in April 2018; the resulting consolidation boosted reported Subscription Video Services, while pro forma revenue rose 4% and EBITDA declined 1%.

Financial highlights

• Revenue increased $885M YoY to $9.024B; Total Segment EBITDA increased to $1.072B from $885M.

• Reported net loss attributable to shareholders was $1.514B versus $738M; operating results included major noncash impairments, Foxtel investment write-downs and transaction-related charges.

• Pro forma revenue rose 4% to $10.564B, while Total Segment EBITDA was $1.444B versus $1.461B; pro forma net loss attributable to shareholders was $1.114B.

• Net cash from continuing operations was $757M, up from $499M; free cash flow available to News Corporation was $249M versus $113M.

Outlook and guidance

• Management expects subscription video investment in programming rights and technology to support subscriber growth; a new over-the-top streaming service was planned for later in 2018.

• Foxtel FY19 capital expenditures were expected to exceed FY18 by more than $50M, primarily for subscriber-related spending.

• Management cited continued growth potential in digital real estate, digital subscriptions and the combined Foxtel business.