For its first quarter this year News Corp has recorded a revenue of $2.06bn, an increase of 5 per cent compared to $1.97bn in the prior year.
However the company says growth was partially offset by lower print advertising revenues in the news and information services segment.
Overall advertising revenues were flat compared to the prior year with a modest increase in digital advertising revenue offset by weakness in the print advertising market.
Growth came from the digital real estate services segment, and with the acquisitions of Australian Regional Media, Wireless Group, and a $26m positive impact from foreign currency fluctuations.
[Related: Print affects News Corp revenue]
Net income of $87m compared to nil in the previous year was primarily driven by higher total segment EBITDA and lower depreciation and amortization expense, partially offset by higher income tax expense associated with higher pre-tax income.
The company recorded a total segment EBITDA of $249m, a 92 per cent increase compared to $130m in the prior year. This was due to a strong performance across all segments as well as a one-time $46m benefit from the reversal of certain previously accrued net liabilities related to certain employment taxes in the UK.
Digital revenues represented 27 per cent of news and information services segment revenues, compared to 24 per cent in the prior year.
[Related: Magazine print ads better for brands]
Robert Thomson, CEO, Newscorp says, “In the first quarter, revenues and segment EBITDA increased across every segment of our business, in particular, in digital real restate services, which have become core to our character and are on track for significant growth in coming quarters. Total reported revenues this quarter increased 5 per cent to $2.1bn, net income increased to $87m and total segment EBITDA rose 92 per cent to $249m. Excluding one-time items and foreign currency impacts our underlying total adjusted segment EBITDA grew 46 per cent.
“We have reason for optimism about the future for our premium media businesses, in light of the profound changes agreed by Google in the ranking of news content. These changes follow almost a decade of campaigning by news Corp, which led the world in understanding the threat to and the opportunities for quality journalism in the digital age. We are continuing our discussing with both Google and Facebook about further facilitating subscriptions and the sharing of permissioned personal data. And we look forward to serving our advertisers with data that is reliable not risible.
“In August, we and Telstra announced a non-binding agreement to combine Foxtel and Fox Sports Australia with News Corp owning 65 per cent of the new company. Pending definitive documentation and regulatory approval, we expect to close in the first half of the calendar year of 2018. The combined company, with major control by News Corp is expected to fundamentally transform our revenue and EBITDA profile, and increase the relative share of digital subscription businesses.”
News and information services revenue increased $19m or 2 per cent from $1.22m to $1.24m, within the segment News Corp Australia grew 4 per cent.
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