News Corp (NWS) Q4 2020 earnings summary

Executive summary

• FY20 revenue fell 11% YoY to $9.008B; net loss attributable to shareholders was $1.269B, including $1.69B of non-cash impairments and $140M of restructuring charges.

• Reported total Segment EBITDA was $1.013B, down from $1.244B; digital revenues exceeded $1B and represented 66% of total revenue.

• COVID-19 weakened advertising, real estate, print and sports-related revenue, while digital subscriptions, streaming and audience engagement advanced in several businesses.

Financial highlights

• Revenue was $9.008B, down $1.066B YoY; COVID-19 had an estimated $370M negative revenue impact, and FX reduced revenue by $275M.

• Operating expenses fell 11% to $5.000B and SG&A fell 6% to $2.995B, reflecting divestiture effects, cost savings and lower production and programming costs.

• Net loss was $1.545B versus net income of $228M; net loss attributable to shareholders was $1.269B, or $2.16 per diluted share.

• Operating cash flow was $780M; capital expenditures were $438M and free cash flow available to News Corp was $180M, down from $213M.

Outlook and guidance

• FY21 capital expenditures are expected to be ~$400M, subject to FX; FY21 Foxtel cost reductions are estimated at $100M net of $55M in deferred sports rights costs.

• Shared Services is expected to generate annualized cost savings of at least $100M beginning FY22; COVID-19 impacts were expected to continue into FY21, with timing and scale uncertain.

• Sports rights renegotiations are expected to save at least A$180M over three years versus prior contracted value.