The Motley Fool

News Corp share price higher: Still profitable despite falling news revenues

The News Corp (ASX: NWS) share price has jumped 2.13% higher to $18.71 in lunchtime trade on Friday.

This comes after the global mass media giant released its second-quarter earnings release for the three months ending 31 December 2018, managing to turn a profit despite falling revenues in the company’s largest segment, News and Information Services.

A summary of the financial results is provided below:

  • Revenue grew 21% on the previous corresponding period.
  • Net income was $119 million compared to a $66 million loss in the previous corresponding period. The previous corresponding period included a $174 million charge related to the enactment of the U.S.Tax Cuts and Jobs Act.
  • Adjusted EPS was $0.18 compared to $0.24 in the previous corresponding period.

The company saw strong revenue growth bolstered by the merger of Foxtel and Fox Sports into a combined entity, which News Corp holds a 65% stake in. Previously News Corp had held a 50% stake in Foxtel and a 100% stake in Fox Sports, so the transaction saw Foxtel’s results being consolidated with News Corp’s.

Areas of strength include News Corp’s Digital Real Estate Services segment, which saw 7% revenue growth on the same period last year, and its Book Publishing segment, which grew 6%.

These segments are relatively small compared with News and Information Services, which saw revenue drop by 3% and a 15% contraction in EBITDA. Weakness in the company’s newspaper businesses continues to be an issue, albeit partially offset by growth in digital advertising revenues.

It’s worth paying attention to the company’s Subscription Video Services segment, however, which launched Kayo Sports in late November 2018. The sports-only OTT streaming service now has 115,000 subscribers and was launched to very positive reviews. The move signifies News Corp’s attempts to adapt to changing consumer’s preferences amidst falling broadcast subscribers.

The News Corp share price has climbed 14.75% so far in 2019, compared to a gain of 7.6% for the S&P/ASX 200 index.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Cale Kalinowski has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.