News Corp Earnings Beat Estimate

Zacks

Rupert Murdoch controlled diversified media conglomerate News Corporation (NWSA) reported fourth-quarter fiscal 2013 results. The publisher of The Wall Street Journal and the owner of Dow Jones posted quarterly earnings of 48 cents a share that beat the Zacks Consensus Estimate of 15 cents, buoyed by higher revenue.

Including one-time items, the company reported a quarterly loss of $1.94 per share that fared better than the prior-year quarter loss of $3.83.

The company, which split from Twenty-First Century Fox, Inc. (FOXA) on Jun 28, 2013, said that total revenue for the quarter came in at $2,257 million, up 5.8% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $2,210 million.

For fiscal year 2013, News Corporation reported earnings of 87 cents a share substantially up from a loss of $3.58 delivered in the prior year, and outdid the Zacks Consensus Estimate of 61 cents. Total revenue of this Zacks Rank #4 (Sell) stock jumped 3% year over year to $8,891 million but fell short of the Zacks Consensus Estimate of $8,926 million.

Total revenue benefited from higher circulation and subscription revenue that surged 13% to $2,669 million, partially offset by a drop of 7% in advertising revenue of $4,346 million.

Segments Performance for the Year

We observe that revenue across News and Information Services segment fell 5% year over year to $6,731 million primarily due to waning advertising revenue, indicating a soft economic scenario in Australia and a decline in advertising revenue at Dow Jones. Segment EBITDA also tumbled 15% to $795 million.

Cable Network Programming segment revenue came in at $324 million, while EBITDA was $63 million, reflecting the consolidation of FOX SPORTS Australia since Nov 2012 attributable to the acquisition of Consolidated Media Holdings Ltd. (“CMH”), a media investment company that has its operations in Australia.

Revenue at Digital Real Estate Services segment soared 21% year over year to $345 million, whereas EBITDA jumped 30% to $168 million.

Book Publishing segment, which consists of HarperCollins Publishers, reported revenue of $1,369 million, up 15% from the prior year. EBITDA for News Corporation’s book publishing business, which competes with e-book devices sold by Amazon.com Inc. (AMZN) and Apple Inc. (AAPL), came in at $142 million, increasing 65% year over year.

The Other segment, which comprises Amplify, a digital education business, posted revenue of $122 million that inched up 1% from the previous year. EBITDA for the segment was a loss of $480 million compared with a loss of $372 million in the prior period.

Other Financial Aspects

News Corporation ended fiscal 2013 with cash and cash equivalents of $2,381 million, amounts due from Twenty-First Century Fox of $247 million, and shareholders’ equity of $12,558 million, excluding non-controlling interest of $118 million.

Capital expenditures for the year were $332 million, while free cash flow generated during the year was $72 million.

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