News (US:NWS)2022-11-09 12:15Financial Performance - Total revenues decreased by $24 million, or 1%, for the three months ended September 30, 2022, compared to the same period in 2021, totaling $2.478 billion[123]. - Net income attributable to News Corporation stockholders was $40 million for the three months ended September 30, 2022, a decrease of 80% compared to $196 million in the same period of 2021[124]. - The Company reported a net income of $66 million for the three months ended September 30, 2022, down 75% from $267 million in the same period of 2021[124]. - Revenue for the three months ended September 30, 2022, was $2,478 million, a decrease of $24 million, or 1%, compared to $2,502 million in the corresponding period of fiscal 2022[146]. - Total Segment EBITDA for the three months ended September 30, 2022, was $350 million, down from $410 million in the same period of fiscal 2022[145]. - Free cash flow for the three months ended September 30, 2022, was $(135) million, compared to $(33) million in the prior year[179]. Revenue Breakdown - Circulation and subscription revenues increased by $34 million, or 3%, to $1.111 billion for the three months ended September 30, 2022[124]. - Consumer revenues decreased by $57 million, or 11%, to $467 million for the three months ended September 30, 2022[124]. - Digital Real Estate Services segment revenues decreased by $5 million, or 1%, to $421 million, with a Segment EBITDA decline of $19 million, or 14%[146]. - Subscription Video Services segment revenues decreased by $8 million, or 2%, to $502 million for the three months ended September 30, 2022, primarily due to foreign currency fluctuations[147]. - Dow Jones segment revenues increased by $71 million, or 16%, to $515 million, driven by acquisitions and growth in digital circulation and advertising revenues[151]. - Total revenues for the News Media segment decreased by $23 million, or 4%, to $553 million for the three months ended September 30, 2022, compared to $576 million in the same period of fiscal 2022[160]. Expenses and Costs - Operating expenses increased by $29 million, or 2%, totaling $1.273 billion for the three months ended September 30, 2022[124]. - Selling, general and administrative expenses rose by $7 million, or 1%, primarily due to increased expenses at the Dow Jones segment[129]. - The decrease in revenue was primarily driven by lower physical book sales and negative foreign currency fluctuations, which resulted in a revenue decrease of $153 million, or 6%[125]. - Segment EBITDA for Book Publishing decreased by $46 million, or 54%, to $39 million, driven by lower revenues and increased manufacturing and freight costs[159]. - Advertising revenues decreased by $10 million, impacted by a $22 million negative effect from foreign currency fluctuations and lower print advertising revenues[162]. Acquisitions and Strategic Moves - The Company acquired OPIS for $1.15 billion in cash in February 2022, enhancing its position in energy and renewables information[117]. - The acquisition of Base Chemicals (CMA) was completed for $295 million in cash in June 2022, furthering the Company's goal in the base chemicals information sector[118]. - UpNest was acquired for $45 million in cash, with potential future payments of up to $15 million based on performance, expanding Realtor.com's services[119]. - The Company is exploring a potential combination with FOX Corporation, with a special committee formed to evaluate the transaction[120]. Subscriber Metrics - The total number of broadcast subscribers decreased to 1,439,000 from 1,605,000 year-over-year, while streaming subscribers increased to 4,605,000 from 3,970,000[149]. - The total consumer subscriptions for The Wall Street Journal increased to 3,778,000, an 8% increase from the previous year[153]. - The average monthly broadcast residential subscription revenue per user (ARPU) increased to A$83 (US$57) from A$82 (US$60) year-over-year[149]. Legal and Regulatory Matters - The Company is involved in various legal proceedings, which may adversely affect its financial condition and results of operations[191]. - The Company establishes accrued liabilities for legal claims when a loss is probable and can be reasonably estimated[192]. - The Company's tax returns are subject to ongoing reviews, and liabilities may need adjustments based on new information[193]. - There has been no material change in the Company's assessment of its sensitivity to market risk since the last report[194]. Cash and Debt Management - Cash and cash equivalents as of September 30, 2022, were $1.5 billion, with an additional $752 million held by foreign subsidiaries[165][166]. - Total borrowings as of September 30, 2022, amounted to $3.0 billion, including the current portion[181]. - The Company repurchased 5.0 million shares of Class A Common Stock for approximately $84 million and 2.5 million shares of Class B Common Stock for approximately $43 million during the three months ended September 30, 2022[170]. - A semi-annual cash dividend of $0.10 per share was declared in August 2022, paid on October 12, 2022[171].