News Corporation Class A ((NWSA)) has held its Q4 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, News Corporation Class A conveyed a generally positive sentiment, underscoring significant achievements such as record-breaking profitability and robust performances in key segments like Dow Jones and Digital Real Estate. Despite acknowledging challenges in the advertising environment and softer book and housing markets, the overall sentiment was optimistic, with positive results and strategic initiatives outweighing these hurdles.
Record-Breaking Profitability
News Corporation reported a remarkable financial year, with revenues increasing by 2% to nearly $8.5 billion. The total segment EBITDA improved by 14% to just over $1.4 billion, marking a record for the company. Additionally, net income from continuing operations saw a substantial rise of 71% to $648 million, showcasing the company’s strong financial health.
Strong Performance in Dow Jones
The Dow Jones segment demonstrated impressive growth, with revenues rising 4% and EBITDA increasing by 8% for the year. The fourth quarter was particularly strong, with a 7% increase in revenue to $604 million and a 10% rise in EBITDA to $151 million, highlighting the segment’s consistent performance.
Digital Real Estate Growth
Digital Real Estate continued its upward trajectory, with revenues rising 9% for the year and segment EBITDA increasing by 18%. Realtor.com, a key player in this segment, reported revenue growth for the third consecutive quarter, indicating sustained momentum in digital real estate services.
Book Publishing Success
Book Publishing achieved its second-best revenue year on record, with a 3% increase to $2.1 billion. Segment EBITDA expanded by 10% to $296 million, demonstrating the division’s ability to maintain strong performance despite market challenges.
New $1 Billion Stock Repurchase Program
Reflecting confidence in future growth, the Board authorized a new $1 billion stock repurchase program. This initiative, alongside the remaining $300 million from the previous program, underscores the company’s robust financial position and strategic focus on enhancing shareholder value.
Challenges in Book Market
Despite the success in book publishing, the company noted softness in the overall book market in recent months. This has affected some divisions, although others continue to perform well, highlighting the mixed dynamics within the market.
Advertising Environment Challenges
The News Media segment faced a challenging advertising environment. However, profitability improved by 15% for the year, thanks to editorial creativity and effective cost management, demonstrating resilience in a tough market.
Softer U.S. Housing Market
While Realtor.com showed growth, the broader U.S. housing market remains sluggish. High interest rates and low turnover continue to impact the market, presenting ongoing challenges despite the company’s strong digital real estate performance.
Forward-Looking Guidance
Looking ahead, News Corporation anticipates continued robust financial performance. CEO Robert Thomson highlighted a record year for profitability, with expectations of sustained growth in key segments. CFO Lavanya Chandrashekar emphasized the focus on high-margin content licensing and recurring digital revenues. The significant discount between the current share price and net asset value supports the accelerated stock buyback program, reflecting confidence in the company’s future prospects.
In summary, News Corporation’s earnings call painted a positive picture, with record-breaking profitability and strong performances in key segments. While challenges in the advertising and housing markets were acknowledged, strategic initiatives and robust financial health position the company well for future growth.