News Corporation (ASX: NWS) shares are popping on Thursday.
In morning trade, the ASX 200 media stock is up over 9% to a 52-week high of $43.10.
Why is this ASX 200 stock jumping?
Investors have been buying the media giant's shares after it released its second quarter results. Here's a summary of what the company reported:
- Quarterly revenue up 3% to US$2.59 billion
- Total EBITDA was up 15.6% to US$473 million
- Net income jumped 95% to US$183 million
- Adjusted earnings per share up 86% to 26 US cents
What happened during the quarter?
For the three months ended 31 December, the ASX 200 stock reported a 3% lift in revenue to US$2.59 billion.
This was driven primarily by higher Australian residential revenues at REA Group Ltd (ASX: REA), continued strong growth in the Dow Jones professional information business, increased digital sales, and improved returns due to better sell through of Book Publishing inventory.
Offsetting some of this growth were lower revenues at Move due to continued challenging housing market conditions in the U.S. and lower advertising revenues at the News Media segment.
On the bottom line, the ASX 200 stock posted a 95% jump in net income to US$183 million. This reflects lower costs at the Book Publishing segment, gross cost savings, and improved equity losses of affiliates.
Management commentary
News Corp chief executive, Robert Thomson, was pleased with the quarter. He said:
News Corp again saw growth in both revenue and profitability this quarter as we continue to realize the collective benefit of our strategic shift to digital and subscription revenues, and away from sometimes volatile advertising revenues. Our net income rose to $183 million from $94 million in the same quarter last year and our reported EPS was 27 cents, compared to 12 cents for the same period last year, driven by a 16% surge in Total Segment EBITDA. We had particularly robust results across the three core pillars of our business – Dow Jones, Book Publishing and Digital Real Estate Services – and believe there are strong prospects for further growth as difficult macro conditions ease in some of our markets.
Thomson also spoke about the rise of generative AI and the role that News Corp can play in it. He adds:
We expect to be a core content provider for Generative AI companies, who need the highest quality, timely content to ensure the relevance and accuracy of their products. We patently prefer negotiation to litigation, courtship to courtrooms. But let's be clear, in my view those who repurpose without approval are stealing and are undermining the very act of creativity – counterfeiting is not creating, and the AI world is replete with content counterfeiters.
