News Corporation (NWSA) Q1 Earnings Meet Estimates, Fall Y/Y
Zacks Investment Research | Nov 07, 2019 09:01PM ET
News Corporation (NASDAQ:NWSA) came out with first-quarter fiscal 2020 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line met the same. Notably, both revenues and earnings per share continued to decline year over year. Management highlighted that foreign currency headwinds, softness in Australian economy and property market, and absence of the net benefit related to the exit from the gaming partnership hurt the quarterly performance. Nonetheless, the company registered robust growth at Dow Jones and increased revenues at Move.
The company — which is in discussions about the sale of News America Marketing and reviewing the potential sale of Unruly — delivered adjusted earnings of 4 cents a share that came in line with the Zacks Consensus Estimate. However, earnings declined sharply from 17 cents reported in the year-ago period on account of dismal top-line performance.
News Corporation reported total revenues of $2,340 million, down 7% from the year-ago quarter. Total revenues also fell short of the Zacks Consensus Estimate of $2,400 million, marking the third straight miss.
The year-over-year decline in revenues can be attributed to $84 million adverse impact of currency fluctuations, absence of the net benefit related to News UK’s exit from the gaming partnership with Tabcorp for Sun Bets, fall in print advertising revenues at the News and Information Services segment and decline in subscription revenues at Foxtel. Moreover, lower revenues at REA Group thanks to tough Australian housing market and at Book Publishing segment also hurt the top-line results.
Excluding the impact of acquisitions, divestitures and foreign currency fluctuations, adjusted revenues of $2,408 million fell 4% year over year.
While advertising revenues dropped 8% to $608 million, circulation and subscription revenues decreased 4% to $995 million. Consumer revenues also declined 3% to $387 million, while revenues from real estate were down 4% to $218 million. Meanwhile, Other revenues fell nearly 34% to $132 million.
Total segment EBITDA was $221 million, reflecting a decline of 38% from the prior-year period. Further, adjusted total segment EBITDA plummeted 30% to $251 million.
Shares of this Zacks Rank #3 (Hold) company have fallen 3% in the past three months compared with the Zacks Investment Research
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