The Motley Fool

News Corp swings to profit as digital subscriptions impress

This morning media giant News Corp Inc. (ASX: NWS) reported its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year. All figures in US$.

  • Revenue of $10.07b, up 12%
  • Net profit of $228m, compared to a net loss of $1.44b
  • Total segment EBITDA $1.24b, versus $1.07b
  • Adjusted earnings per share 46cps, compared to 44cps
  • Q4 total revenues of $2.47 billion, -8%, partly due to the $105 million FX headwind
  • Q4 segment EBITDA $269 million, -14% decrease
  • Q4 EPS 6cps, versus 7cps in prior comparative period
  • The Wall Street Journal subscribers reached a record of 2.6 million

“Significantly, we posted higher Segment EBITDA at our News and Information Services segment, thanks to a rapid rise in digital paid subscribers, particularly at Dow Jones. The Wall Street Journal recorded a notable increase in digital-only subscribers, who now account for over 69 percent of the total subscriber base,” commented News Corp boss Robert Thomson.

While its core news and information services business delivered a robust year after adjusting for FX headwinds, the digital real estate services segment largely under Move Inc and was softer on the back of weaker property markets in Australia and the US. 

Print advertising revenues and subscriptions also continue to fall, although digital is growing nicely across News Corp’s flagship mastheads The Wall Street Journal, The Australian, The Times, The Sunday Times and The Sun

It also merged the Fox Sports and Foxtel business in Australia and introduced a Kayo online sports steaming service in a bid to halt the decline in subscriptions across its Fox Sports offerings. 


The ASX-listed scrip is flat at A$19.58 on the results this morning. The US listed scrip closed at $13.03 on around 28x trailing earnings of 46 cents per share. 

This morning REA Group Limited (ASX: REA) which is majority owned by News Corp reported a full year net profit of $296 million on EBITDA of $501 million and revenue of $875 million.

This is on an EBITDA margin of 57% and for investors shows the benefits of being a capital-light digital only business that is relatively scalable. REA Group also boasts a return on equity close to 30%. By comparison News Corp’s EBITDA margin is just 12%. 

Traditional value investors may prefer something like News Corp to investigate, whereas those prepared to bet on growth may prefer REA.

The Motley Fool’s #1 BANK STOCK for 2019

BRAND NEW! For a limited time, The Motley Fool Australia is giving away an urgent new investment report with all the details on our #1 BANK STOCK for the next 12 months and beyond…

Now, if you’ve been around this site for any length of time, you know The Motley Fool usually shuns bank shares.

But we’ve recently discovered a ‘hidden in plain sight’ bank stock with what we think is mouth-watering potential.

With the company boasting nearly 25% net profit growth every year for the last 5 YEARS…

And the shares paying a fully franked dividend that beats the pants off term deposits!

So if you like steady, high-growth income plays – we’ve got you covered!

You’re invited. Simply click the link below to discover our #1 ASX bank stock to profit in 2019. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.


Motley Fool contributor Tom Richardson owns shares of REA Group Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has recommended REA Group Limited. 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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new 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 2.8% 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.