The News Corp (ASX: NWS) share price is having a moment in the sun today. This follows the media giant's announcement of its first-quarter results for FY22.
At the time of writing, shares in the company are gliding 8.9% above their previous close at $34.52. With today's strong price appreciation, News Corp shares are now only 2% away from setting a new 52-week high.
Image source: Getty Images
What's moving the News Corp share price today?
Investors are sending the News Corp share price skywards to finish the week. Given the company released its first-quarter results prior to the market opening today, it is likely that the market is fixated on details within this announcement.
As we covered earlier, the large media outlet handed down a solid quarter performance. Not only did revenue grow by 18% year on year to $2.5 billion, but earnings also increased by more than a factor of five.
The uptick in operations wasn't reduced to only one segment either. All five News Corp's business segments reported revenue growth. Most noticeably, digital real estate services posted a massive 47% leap in revenue compared to the prior year.
However, the biggest contributor in terms of growth to the company's earnings before interest, tax, depreciation, and amortisation (EBITDA) was the subscription video services segment. According to the release, EBITDA for this segment increased 46% to $114 million.
The subscription video services part of News Corp incorporates streaming services such as Foxtel, Kayo, and BINGE. At the end of the quarter, Foxtel subscribers had reached 3.9 million, increasing 17% year on year. The improved earnings margin was the product of lower sports programming rights and production costs.
Making sense of the valuation
After the improvement in News Corp quarterly numbers, analysts are likely running the numbers again to check against their price targets.
If we summarise the net income of Q2, Q3, and Q4 of FY21 with our latest Q1 FY22 results, we can get an indication of the company's trailing 12-month earnings. With some quick back-of-the-napkin math, this works out to be ~$427 million.
Based on the current News Corp share price and our calculated 12-month trailing earnings, News Corp is currently trading on an approximate price-to-earnings (P/E) ratio of 44 times.
