News Corporation Reports Third Quarter Results for Fiscal 2021

Rhea-AI Summary

News Corporation (Nasdaq: NWS, NWSA) reported a strong fiscal Q3 2021, with total revenues of $2.34 billion, up 3% year-over-year. Notably, net income reached $96 million, a significant turnaround from a $1 billion loss in the prior year. The Company highlighted a 23% increase in profitability, driven by growth in Digital Real Estate Services, Dow Jones, and Book Publishing, which collectively saw Segment EBITDA growth of 55%. Furthermore, historic agreements with Google and Facebook are expected to reshape the media landscape positively.

Positive

• Total revenues grew to $2.34 billion, a 3% increase YoY.
• Net income of $96 million, a turnaround from $1 billion loss YoY.
• 23% increase in profitability in Q3.
• Digital Real Estate Services revenue up 37%, with 100 million unique users.
• Segment EBITDA growth of 55% in Digital Real Estate Services, Dow Jones, and Book Publishing.

Negative

• Lower revenues in the News Media segment due to divestiture and print advertising weakness.
• Negative impact of $199 million from the divestiture of News America Marketing.
• Closure or transition to digital of certain regional newspapers in Australia impacted revenue by $28 million.

News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2021. Commenting on the results, Chief Executive Robert Thomson said:

“The financial year is on a trajectory to be the most profitable since our reincarnation in 2013. This highlights the transformed character of the Company, with improved revenue performance and a 23 percent increase in profitability in the third quarter.

The results vindicate the strategy of simplifying the asset mix, vigorously pursuing digitization, slimming the cost base, and investing in three growth areas — Digital Real Estate Services, Dow Jones and Book Publishing — which collectively generated 55 percent Segment EBITDA growth in the third quarter.

Move, operator of realtor.com^®, flourished, with 37 percent revenue growth, and more than 100 million unique users in March, a 60 percent increase on a year earlier. At Dow Jones, digital revenues reached 74 percent of the total, with digital advertising growing by a robust 30 percent and The Wall Street Journal subscriptions setting record after record. And at Book Publishing, revenues rose 19 percent, thanks to a valuable backlist and faster digital growth.

Foxtel’s resurgence during the pandemic reflected the enduring value of its broadcast offering, the rapid growth of streaming services, and a relentless focus on costs, all of which contributed to a 34 percent surge in Segment EBITDA.

We have reached historic deals with Google and Facebook, and continue our international campaign to reset the terms of trade for premium journalism. The cooperation in recent weeks with the Google team has certainly been productive and we look forward to further engagement with Facebook. These landmark agreements have meaningfully and materially changed the media landscape.

Finally, we successfully completed our inaugural bond offering, which was met with extremely high demand, and was a resounding vote of confidence in the Company’s strategy and its prospects.”

THIRD QUARTER RESULTS

The Company reported fiscal 2021 third quarter total revenues of $2.34 billion, 3% higher compared to $2.27 billion in the prior year period. The increase was driven by the $176 million, or 8%, positive impact from foreign currency fluctuations and continued growth in the Digital Real Estate Services, Book Publishing and Dow Jones segments. The growth was partially offset by lower revenues at the News Media segment, primarily driven by a $199 million, or 9%, negative impact from the divestiture of News America Marketing, weakness in the print advertising market and a $28 million, or 1%, negative impact from the closure or transition to digital of certain regional and community newspapers in Australia. Adjusted Revenues (which exclude the foreign currency impact, acquisitions and divestitures as defined in Note 2) increased 4%.

Net income for the quarter was $96 million compared to a net loss of $(1) billion in the prior year, reflecting the absence of $1.1 billion of non-cash impairment charges in the prior year, higher Total Segment EBITDA, as discussed below, and higher Other net, partially offset by higher tax expense.

The Company reported third

FAQ

What were the Q3 2021 financial results for News Corporation (NWS, NWSA)?

News Corporation reported Q3 2021 revenues of $2.34 billion, a 3% increase YoY, and net income of $96 million.

How did the Digital Real Estate Services perform in Q3 2021 for NWS, NWSA?

Digital Real Estate Services saw a 37% revenue growth in Q3 2021, reaching over 100 million unique users.

What impact did foreign currency have on News Corp's Q3 2021 revenue?

Foreign currency fluctuations positively impacted revenue by $176 million, contributing to overall growth.

Did News Corporation sign any significant deals in Q3 2021?

Yes, News Corporation reached landmark agreements with Google and Facebook, positively influencing the media landscape.

What are the growth areas for News Corporation indicated in the Q3 2021 report?

Key growth areas include Digital Real Estate Services, Dow Jones, and Book Publishing, generating significant Segment EBITDA growth.