News Corp Reports Fourth Quarter and Full Year Results for Fiscal 2019
Fiscal 2019 Full Year Key Financial Highlights
- Revenues were $10.07 billion, a 12% increase compared to $9.02 billion in the prior year, reflecting the consolidation of Foxtel for the full year and growth at the Digital Real Estate Services segment
- Net income of $228 million compared to a net loss of ($1.44) billion in the prior year
- Total Segment EBITDA was $1.24 billion compared to $1.07 billion in the prior year
- Reported diluted EPS were $0.26 compared to ($2.60) in the prior year – Adjusted EPS were $0.46 compared to $0.44 in the prior year
- The Wall Street Journal subscribers reached a record of 2.6 million with digital-only subscribers accounting for approximately 69% of the total subscriber base
- Book Publishing reported record Segment EBITDA, helped by successful front-list titles, strong backlist and continued expansion of downloadable audiobook sales
- Strengthened the Digital Real Estate Services segment through strategic investments including the acquisitions of Opcity and Hometrack Australia
- Subscribers for Foxtel’s over-the-top services grew over 90% since the beginning of the calendar year with approximately 777,000 paid OTT subscribers, including approximately 331,000 paid subscribers at Kayo
- Announced the strategic review of News America Marketing
New York, NY – August 8, 2019 – News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months and fiscal year ended June 30, 2019.
Commenting on the results, Chief Executive Robert Thomson said:
“News Corp completed Fiscal 2019 robustly, with revenues rising 12 percent and profitability 16 percent higher compared to the prior year, reflecting the consolidation of Foxtel, strength in digital real estate and substantial progress in the successful digital transformation of our news businesses.
We are acutely focused on simplifying the structure of the company and making clear the full value of the sum of our parts. To that end, we recently announced a strategic review of News America Marketing, including a sale of the business; we have received material interest and the process is progressing well.
Significantly, we posted higher Segment EBITDA at our News and Information Services segment, thanks to a rapid rise in digital paid subscribers, particularly at Dow Jones. The Wall Street Journal recorded a notable increase in digital-only subscribers, who now account for over 69 percent of the total subscriber base. The Risk & Compliance business is also flourishing, with revenue expanding 24 percent, the fourth consecutive year of growth well above 20 percent.
For the Digital Real Estate Services segment, both REA and realtor.com? strengthened their competitive positions through strategic acquisitions and product enhancements, despite headwinds in housing markets. We note with interest the recent signs of improvement in the U.S. housing environment, with lead volume improving, record traffic to realtor.com? and an uptick in pending home sales.
At Foxtel, paying subscribers for the Kayo sports streaming service more than doubled between the third and fourth quarters to 331,000, while average churn among sports subscribers to the Foxtel broadcast service actually fell during the same period. Clearly, Kayo is adding significantly to the total number of sports viewers in Australia prepared to pay for premium content.”
Full Year Results
The Company reported fiscal 2019 full year total revenues of $10.07 billion, a 12% increase compared to $9.02 billion in the prior year period, reflecting the impact from the consolidation of Foxtel’s results following the combination of Foxtel and FOX SPORTS Australia (the “Transaction”) into a new company in the fourth quarter of fiscal 2018 and growth in the Digital Real Estate Services segment. The growth was partially offset by a $311 million negative impact from foreign currency fluctuations, lower print advertising and News America Marketing revenues at the News and Information Services segment, and $72 million of lower revenues as a result of the adoption of the new revenue recognition standard. Adjusted Revenues (which exclude the foreign currency impact, acquisitions and divestitures as defined in Note 1) increased 1%.
Net income for the full year was $228 million as compared to a net loss of ($1.44) billion in the prior year. The improvement was primarily driven by the absence of the non-cash impairment charges and write-downs of $1.2 billion recognized in fiscal 2018, higher Other, net, lower tax expense and higher Total Segment EBITDA, as discussed below. The improvement was partially offset by higher depreciation and amortization expense and higher interest expense.
Total Segment EBITDA for the full year was $1.24 billion, a 16% increase compared to $1.07 billion in the prior year, driven by the consolidation of Foxtel’s results and higher contribution from the News and Information Services and Book Publishing segments. Adjusted Total Segment EBITDA (as defined in Note 1) increased 4%.
Diluted net income per share available to News Corporation stockholders was $0.26 as compared to net loss per share of ($2.60) in the prior year.
Adjusted EPS (as defined in Note 3) were $0.46 compared to $0.44 in the prior year.
Fourth Quarter Results
The Company reported fiscal 2019 fourth quarter total revenues of $2.47 billion, an 8% decline compared to $2.69 billion in the prior year period, primarily due to the $105 million negative impact from foreign currency fluctuations, lower revenues at the Book Publishing segment, which includes the absence of the one-time contribution from the sublicensing agreement for J.R.R. Tolkien’s The Lord of the Rings trilogy, lower broadcast subscriber revenues at the Subscription Video Services segment, lower advertising revenues at the News and Information Services segment and $18 million of lower revenues as a result of the adoption of the new revenue recognition standard. Adjusted Revenues decreased 5%.
Net loss for the quarter was ($42) million as compared to a net loss of ($355) million in the prior year. The improvement was mainly due to the absence of the write-off of the FOX SPORTS Australia channel distribution agreement (the “FSA channel distribution agreement”) intangible asset of $317 million in the prior year, which was reflected in Other, net, and lower tax expense. The improvement was partially offset by lower Total Segment EBITDA and higher impairment and restructuring charges.
Total Segment EBITDA for the quarter was $269 million, a 14% decrease compared to $314 million in the prior year, reflecting lower revenues, as discussed above, and higher costs associated with continued investment in Opcity in the Digital Real Estate Services segment. The decline was partially offset by cost reductions at the News and Information Services segment. Adjusted Total Segment EBITDA decreased 8%.
Net loss per share available to News Corporation stockholders was ($0.09) as compared to ($0.64) in the prior year.
Adjusted EPS were $0.07 compared to $0.08 in the prior year.
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About News Corp
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: news and information services, subscription video services in Australia, book publishing and digital real estate services. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: http://www.www.beiw.net.cn.
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