News Corp (NWS) Q4 2019 earnings summary

Executive summary

• FY19 revenue rose 12% to $10.074bn and Segment EBITDA increased 16% to $1.244bn; growth was driven primarily by consolidating Foxtel, alongside progress in Book Publishing, Digital Real Estate Services and digital news subscriptions.

• Reported net income was $228m, including $155m attributable to stockholders; diluted EPS was $0.26. Prior-year results included major non-cash impairments and transaction-related losses.

• On a pro forma basis including Foxtel in both years, FY19 revenue declined 5% to $10.074bn, reflecting currency headwinds, print advertising weakness and lower broadcast subscribers and package mix.

Financial highlights

• Revenue was $10.074bn, up $1.050bn or 12% reported; Foxtel consolidation contributed $1.289bn to the increase, while currency reduced revenue by $311m.

• Segment EBITDA was $1.244bn versus $1.071bn; net income was $228m versus a $1.444bn loss, and stockholder-attributable net income was $155m versus a $1.514bn loss.

• Diluted EPS was $0.26 versus a loss of $2.60; FY19 included $96m of non-cash impairment charges and $92m of restructuring charges.

• Pro forma revenue fell 5% to $10.074bn and Segment EBITDA was $1.244bn versus $1.443bn; pro forma net income improved to $228m from a $1.018bn loss, largely as prior-year impairments did not recur.

Outlook and guidance

• Foxtel FY20 capital expenditures were expected to be ~20% below FY19; a new programming strategy was expected to increase non-cash programming amortization in FY20.

• HarperCollins expected double-digit downloadable audiobook revenue growth to continue in FY20, following 40% growth in FY19.

• Management cited potential for greater value flows to content creators as digital platforms face greater regulatory scrutiny, while emphasizing portfolio simplification, premium content and digital distribution.

• realtor.com® was undergoing a transformation around Opcity and performance-based leads; the investment and revenue-model shift affected FY19 results but was positioned for future growth.