News Corporation’s Shares Uplifted on ASX After Announcing Q2 FY19 Financial Results

News Corporation (ASX: NWS) is into media-related services. It is a diversified global company. The group is involved in the generation of content for consumers and big businesses. Ranging from news, information services, digital real estate services, to educational-related content, the company has diverse distribution platforms.

On 8 February 2019, the company has reported the financial results for the Q2 FY19. The total revenues for the FY19 second quarter stood at $2.63 billion, up by 21% compared to $2.18 billion in the prior year period.

The growth was due to the impact of the consolidation of Foxtel’s results after Foxtel and FOX SPORTS Australia combined to form a new company. Moreover, continued strong performances at the book Publishing and digital real estate services segments also contributed to the increase in revenue, and to some extent, the increase was offset by lower print advertising revenues. at the news and information services segment. 

The results also include a $67 million negative impact from foreign currency fluctuations and $20 million of lower revenues since the company has adopted the new revenue recognition standard. Net income was $119 million as compared to a net loss of ($66) million, which included a $174 million negative impact related to the U.S. Tax Cuts and Jobs Act in the previous year. The total Segment EBITDA stood at $370 million compared to $328 million in the previous year.

The reported EPS stood at $0.16 in FY18 compared to ($0.14) in the previous year of FY17; however, the adjusted EPS stood at $0.18 compared to $0.24 in the prior year.

Net cash flow from operating activities improved by $154 million for the six months ended December 31, 2018, as compared to the prior corresponding period. This was primarily due to higher total segment EBITDA, and lower cash tax payments of $24 million, partially offset by $35 million in higher cash paid for interest.

The free cash flow available the company in the six months ended December 31, 2018, stood at $26 million, as compared to $16 million in the prior year period. This improvement was on the back of higher cash provided by operating activities, partially offset by higher capital expenditures. The capex was $139 million, however, related to new Foxtel. The company has launched a sports only streaming service called Kayo Sports.

Now let us quickly have a look at News Corporation’s stock performance and the return it has posted over the last few months. The stock last traded at a price of $18.840 and increased by almost 2.838% during the day’s trade, with a market capitalisation of $10.85 billion. The stock has generated a YTD return of 12.88% and posted negative returns of 11.92% and 1.08% over the last six months and three months period respectively, however over the last month it has generated a return of 9.31%. The stock has a 52-week high price of $22.620 and a 52-week low of $15.980, with an average trading volume of 137,901 approximately.


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