News Corp Beats Q4 Revenue Expectations On Solid Digital Real Estate Growth
News Corp (NASDAQ:NWSA) reported mixed fourth quarter results, as its revenues came in ahead of expectations but EPS missed. The company’s revenues increased 5% year-over-year (y-o-y) to $2.2 billion, beating analysts’ projections of $2.06 billion. It saw strong revenue growth in all divisions except the News and Information Services segment, which saw minimal growth due to lower advertising revenues. The media company posted earnings of 10 cents per share, which was up 25% y-o-y but missed analyst estimates by 3 cents. News Corp’s total EBITDA grew by 68% y-0-y due to the success of REA and growth of Realtor.com within the Digital Real Estate Services.
Solid Growth In Digital Real Estate Services
Digital Real Estate Services is the fastest-growing segment for News Corp, growing by 21% y-o-y to $229 million in the fourth quarter. This increase is attributable to growth in REA group and Move, along with the acquisitions of Diakrit and iProperty. Its segment EBITDA grew by a solid 289% y-o-y, owing to a one-time gain of $122 million in settlement of the Zillow litigation at Move and continued growth at the REA Group, where revenues increased 17% y-o-y due to higher developer and media revenues. For Move, revenues increased 21% y-o-y primarily due to the company’s growth in non-listing Media and professional software revenues.
Continued Headwinds In News And Information Services
The News and Information segment grew marginally and remained a challenge for News Corp, due to continued headwinds in print advertising. The company reported a 5% y-o-y decline in the segment’s EBITDA on account of lower advertising revenues and costs related to the acquisition of Unruly. The company’s advertising revenues declined by almost 5% y-o-y due to weakness in the print advertising market and foreign currency fluctuations. News Corp’s Circulation and Subscription revenues increased 5% y-o-y due to growth in paid digital subscribers, higher subscription pricing, and selected cover price increases in the U.K. and Australia.
Surge in Book Publishing Revenues
The performance of this division improved notably in the fourth quarter as compared to the prior quarters as continued expansion in HarperCollins’ global footprint and higher book publishing revenues resulted in a 52% increase in the Book Publishing segment’s EBITDA.
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