Shares of News Corporation NWSA rose 5.3% on Jun 18 following its announcement of exploring strategic options for News America Marketing (NAM) business, including a potential sale. This move will enable the company to simplify its structure, optimize portfolio and enhance shareholders’ value. Also, it will be able to focus on core areas that include creation and distribution of premium content along with digital real estate services.
This provider of home-delivered shopper media, in-store marketing products and services, and digital marketing solutions has been in troubled waters for a while now. We saw a drop in revenues from NAM unit to the tune of 8% in the third quarter of fiscal 2019 and 7% in the nine months period ended Mar 31, 2019, owing to reduced home-delivered revenues.
Management informed that NAM has extensive in-store marketing media options in more than 60,000 outlets in the United States and Canada. It has reach in households across the country, with circulation of more than 60 million via roughly 2,000 publications. Further, its mobile cash back apps, retailer load-to-card programs and print-at-home couponing help convert shoppers into potential buyers.
For now, News Corporation has not provided any details regarding the timing of review. The company has been looking into every corner for growth prospects. Its efforts to expand digital offerings, with greater emphasis on real estate businesses, bode well. Additionally, the company is diversifying its revenue streams through acquisitions and operational enhancement. It is also concentrating on augmenting the digital subscriber base.
We note that this Zacks Rank #3 (Hold) company gained 14% in the past six months outperforming the industry’s growth of 7.2%.
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