News Corp (NWSA) Q3 Earnings Top, Soft Ad Revenues A Concern
Zacks Investment Research | May 10, 2018 09:56PM ET
Rupert Murdoch-controlled News Corporation (NASDAQ:NWSA) delivered sixth straight quarter of positive earnings surprise, when it reported third-quarter fiscal 2018 results. Also, revenues surpassed the Zacks Consensus Estimate for the third successive quarter. Results gained from sturdy performance at the Digital Real Estate Services, Book Publishing and Cable Network Programming segments.
However, sluggish print advertising demand still remains a concern. Nevertheless, the company is concentrating on cost cutting, expanding digital offerings with greater emphasis on real estate services to mitigate the impact of the same. Management also highlighted that from the final quarter of fiscal 2018, the combination of digital real estate services and pay-TV operations will represent more than half of profits and propel recurring subscription-based revenues considerably.
News Corporation also hinted about the consolidation of Foxtel and FOX SPORTS Australia which is likely to result in circulation and subscription revenues to emerge as one of the prominent revenue streams for the company. This will shield it from volatility in the advertising market. The new segment — Subscription Video Services — formed due to consolidation will also incorporate Australian news channel operator, Sky News.
Notably, shares of the company have gained 9% in the past six months but have underperformed the industry ’s rally of 21%.
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