News Corp (ASX: NWS) declares FY21 Q1 report, share price leapfrogs

  • November 06, 2020 01:53 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

News Corp (ASX: NWS) declares FY21 Q1 report, share price leapfrogs

Summary

  • Media giant released its Q1 reports; reported a profit of US$47 million mainly due to digital real estate businesses. However, print advertising is down.
  • Segment EBITDA at Dow Jones increased 47 per cent. It was driven primarily by record average consumer product subscriptions of 3.88 million.
  • Its book publishing arm also saw substantial growth in the revenues and Segment EBITDA.
Gold MTF non-AMP

American multinational media company, News Corp (ASX: NWS) has announced its FY21 Q1 profit for the period ending on 30 September to be US$47 million. The profit comes from elevating its digital real estate businesses. News Corp witnessed a sharp uptick in its share price after the announcement, currently trading at AUD 21.72, up by 14.14%.

Headquartered in New York City, News Corp is owned by media mogul, Rupert Murdoch. The media giant owns hundreds of newspapers, news channels and magazines in many countries such as The United States, the United Kingdom, Australia. News Corp booked revenue of US$2.12 billion for the quarter ending September 30. The revenue is down from US$2.34 as reported the previous year.

In the recent News Corporation Updates, the company stated that the 10 per cent reduction in the revenue was primarily due to the sale of News American Marketing, marketing business of News Corp.

Also read: Information Services Segment Released Q2 FY2020 Results; Reports 6% Fall in Its Revenue

A strong start to the financial year:

In the race of online entertainment, News Corp added another streaming service Binge to its existing television services such as Foxtel, Kayo Sports. News Corp took a hit on revenue from subscribers which reduced by US$18 million to US$496 million.

Kayo as of 30 September 2020 has 681,000 subscribers of which 644,000 are paid, whereas Binge which was launched in May 2020 has 321,000 users out of which 290,000 are paid.

On a positive note, News Corp reported its total segment EBITDA (earnings before interest, taxes, depreciation, and amortisation) grew by 21 per cent and reached US$268 million. The reason being growth in Book Publishing segments, digital real estate services, and Dow Jones although the decline in News Media Segment partially offset it.

Interesting read: Chevron to Offload 16.7 per cent Stake in NWS JV

 

Growth offered by digital focus:

Robert Thomson, News Corp chief executive, asserted that the fiscal year started strongly for the company. Higher revenue was delivered in many of the segments during the first quarter. The company is delighted as it delivered a 21 per cent increase year-on-year in profitability despite the volatile situation in the market. The company faced disruptive economic consequences of COVID-19 pandemic, much like most of the businesses in the world.

Thomson emphasised on changing the digital landscape fundamentally. The company's role has been crucial in bringing those changes. News Corp believes that the market now recognises the importance of having a premium for premium content. The changes in algorithmic transparency for digital businesses will also be inevitable in the coming years.  

News Corp has also been a leading advocate in the digital advertising segment. Thomson further continued that New Corp is focused and more digital on its drive. The media giant believes that the positive outcome of their strategy is already showing its results. They aim to generate enhanced returns for their investors soon.

Good read: News Corporation Reports Q1FY20 Results, Revenue Down By 7%

 

 


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