AUS
NZ
UK
CA
USA
IND
Highlights
- News Corporation shares have shed off over 10% on the ASX today (9 May 2022).
- The Company has reported an increase of 7% in its Q3-FY22 total revenues, reflecting growth in all revenue lines.
- Free cash flow available decreased due to higher capital expenditures and lowered net cash provided by operating activities.
Grabbing, most-likely, sell-side attention on the ASX today, shares of News Corporation (ASX:NWS), lost more than 10% in its value on Monday. On Friday, the Nasdaq and ASX-listed Media and entertainment business had released its third-quarter financial results for FY22. Today, it has released the 10Q filing to the US SEC confirming the same. While News Corporation reported an increase in revenue from all its operational segments, its share price has been falling since the announcement.
A peak into News Crop’s Q3-FY22 financials
- In the financials, the company has reported a record third-quarter revenue with an increase of 7% compared to the same period in the prior year. The net income in the quarter has grown by 8%, while total segmental EBITDA has shown a 20% increase from the prior year. NWS shares are thus showing a reported EPS of US$0.14 compared to $0.13 in the prior year.
- Looking at its segments, the Dow Jones segment reported its highest Q3 revenue since its acquisition. It saw a 16% growth and continued digital subscription alongside a robust performance in advertising. As of March-end, Foxtel's total paid streaming subscribers were about 62% more than the prior year. The company's digital real estate services segment under REA Group also witnessed revenue growth of 19% in the quarter. The Segment EBITDA expanded by almost 17%. Its news media business continued to benefit from the rebounding advertising market, new content licensing and subscriber gains.
- In terms of expansion, News corporation is anticipating the closure of the OPIS and Base Chemicals acquisition by the end of next month to benefit its Dow Jones vertical. The acquisitions extend the depth and reach its news and information capabilities in the burgeoning commodities sector.
As per the Management-
Image source: © 2022 Kalkine Media ®
Why are News Corporation (ASX:NWS) shares sinking over 10%?
While the company has reported robust earnings in its Q3-FY22, it is still to finalise a few acquisitions and investments for its business expansion. It has also announced a share repurchase program for which many details have not been disclosed. Also, one notable point in the 10Q statement filed with the SEC, is that the company's free cash flows appear to have decreased over the last year's comparable period. It is primarily due to higher capital expenditures and low net cash provided by operating activities only slightly offset by higher dividends received from REA Group (ASX:REA).
As of date, NWS trades on the ASX at AU$23.95 a piece by noon. It has lost almost about 10% on the previous close price. In the last five days of trade, NWS's share price has been down by more than 15%.
Conclusion
On the ASX, News corporation stands at a market capitalisation of AU$16.89 billion and comes in the big-cap category. Any change of over 5% in its share price thus seems worth noticing. Today's change in share price and the trade volumes thus seem to attract investors' attention.
More from ASX- AUB Group (ASX:AUB) acquires Tysers; shares on halt
