Core Insights - News Corporation (NWSA) reported first-quarter fiscal 2026 earnings of 22 cents per share, exceeding the Zacks Consensus Estimate by 22.22%, and reflecting a 10% increase from the previous year's figure of 20 cents [1] - Revenues reached $2.14 billion, marking a 2% year-over-year increase and surpassing the consensus mark by 1.53%, driven by growth in the Digital Real Estate Services and Dow Jones segments [1] Financial Performance - Adjusted revenues increased by 2% year over year, while total segment EBITDA rose 5% to $340 million [2] - Net income from continuing operations was $150 million, slightly up from $149 million in the prior year, and free cash flow improved to $4 million from a negative $49 million [17] Segment Performance Digital Real Estate Services - Revenues in this segment grew 5% year over year to $479 million, with Move's revenues increasing by 9% to $152 million, the highest quarterly growth rate since Q2 fiscal 2022 [3][4] - REA Group revenues rose 3% year over year to $327 million, driven by residential yield increases and customer contract upgrades [5] Dow Jones - Revenues in the Dow Jones segment increased 6% year over year to $586 million, with digital revenues accounting for 84% of total revenues [6][8] - The professional information business saw a 10% revenue increase, with Risk & Compliance revenues growing 16% to $94 million [7] Book Publishing - The Book Publishing segment generated revenues of $534 million, down 2% year over year, with a significant decline in digital sales by 9% [11][12] News Media - Revenues in the News Media segment increased 1% year over year to $545 million, driven by higher circulation and subscription pricing [13] - Advertising revenues remained stable at $85 million, with digital advertising contributing 68% of total ad revenues [9] Strategic Developments - The company has accelerated its share buyback program, repurchasing shares at a rate of approximately $2.5 million per day, reflecting confidence in growth potential [18]

Financial Data and Key Metrics Changes - Revenue for the first quarter of fiscal 2026 rose 2% year-over-year to $2.14 billion, while total segment EBITDA increased by 5% to $340 million [4][19] - Net income from continuing operations was $150 million, slightly up from $149 million last year, and adjusted EPS rose from $0.20 to $0.22 [4][20] - Total segment EBITDA was negatively impacted by a $13 million write-off related to a book distributor closure [19] Business Line Data and Key Metrics Changes - Dow Jones segment revenue increased by 6% to $586 million, with digital revenues accounting for 84% of total segment revenue [21][22] - Digital real estate services reported revenues of $479 million, up 5% year-over-year, with segment EBITDA rising 13% to $158 million [25] - Book publishing segment revenue declined by 2% to $534 million, with EBITDA down 28% to $58 million due to a $13 million write-off [29] Market Data and Key Metrics Changes - Digital revenues have nearly doubled since fiscal 2018, now comprising 62% of total revenues [18] - Digital advertising accounted for 68% of total advertising revenues, a new record for the company [8][24] - The U.S. housing market is showing signs of recovery, with Realtor.com experiencing a 9% revenue boost year-on-year [9][26] Company Strategy and Development Direction - The company is focusing on maximizing shareholder value through accelerated share buybacks, with a current repurchase rate of approximately $2.5 million per day [5][17] - Strategic diversification across high-margin content licensing and digital revenues is emphasized, with a focus on risk and compliance services [18][22] - The company is pursuing partnerships in the AI space and addressing piracy issues through legal actions [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the housing market and the potential for continued revenue growth in digital real estate and Dow Jones [9][30] - The book publishing segment is expected to benefit from improved trends in the coming months, with recent releases performing well [12][31] - Management remains confident in the company's growth potential and plans to continue share repurchases at an elevated rate [17][32] Other Important Information - The company has made strategic acquisitions, such as Eco-Movement, to enhance its data offerings in the professional information business [8][23] - The digital-only subscriptions for the Wall Street Journal surged by 11%, contributing to the overall growth in digital circulation revenues [8][24] Q&A Session Summary Question: Concerns about Realtor's revenue growth sustainability - Management highlighted the ongoing focus on growth areas such as seller, new homes, and rentals, indicating that the strategy is yielding positive results despite market challenges [34] Question: Share repurchase strategy and Wall Street Journal pricing - Management confirmed the accelerated buyback rate and indicated that there is potential for further increases, while also discussing the elasticity of subscription pricing for the Wall Street Journal [38][39] Question: Impact of Factiva dispute settlement on revenues - Management noted that while the settlement had a modest impact, overall performance in Dow Jones was strong, with significant growth in risk and compliance revenues [42][43] Question: Future simplification of the business structure - Management expressed openness to structural changes and emphasized the importance of maximizing shareholder returns through strategic decisions [49] Question: Growth potential in risk and compliance services - Management is optimistic about the growth trajectory in risk and compliance, citing regulatory pressures as a source of new business [52][53] Question: Trajectory of news media business - Management reported a slight revenue increase and significant improvements in EBITDA, driven by cost efficiencies and strong advertising performance at the New York Post [58][59]

Core Viewpoint - News Corporation (NWS) is set to announce its fiscal first-quarter earnings for 2026, with analysts projecting a decline in profit per share compared to the previous year [1][2]. Financial Performance - Analysts expect NWS to report a profit of $0.16 per share on a diluted basis, which represents a 23.8% decrease from $0.21 per share in the same quarter last year [2]. - For the full fiscal year, the expected EPS is $0.79, down 11.2% from $0.89 in fiscal 2025, but is projected to rise to $0.95 in fiscal 2027, reflecting a 20.3% increase from the year-ago quarter [3]. Stock Performance - NWS stock has underperformed the S&P 500 Index, which gained 16.2% over the past 52 weeks, with NWS shares only increasing by 9% during the same period [4]. - The stock also lagged behind the Communication Services Select Sector SPDR ETF, which saw a 27.6% increase [4]. Analyst Ratings - The consensus opinion on NWS stock is bullish, with a "Strong Buy" rating from three out of four analysts, while one analyst recommends a "Hold" [6]. - The average analyst price target for NWS is $39.33, indicating a potential upside of 30.5% from current levels [6].

Financial Data and Key Metrics Changes - Net income from continuing operations increased by 67% to $107 million in the third quarter compared to the prior year, while revenues were $2 billion, up 1% year over year despite currency headwinds [6][24] - Total segment EBITDA rose 12%, with overall margin expanding from 13% to 14.4% [6][24] - Adjusted revenues increased by 2%, and adjusted total segment EBITDA grew by 15% [7][24] - Reported EPS from continuing operations doubled to $0.14, while adjusted EPS was $0.17 compared to $0.13 a year ago [7][24] Business Line Data and Key Metrics Changes - **Dow Jones**: Revenue grew by 6% to $575 million, with digital revenue accounting for 82% of total segment revenues [25][26] - **Digital Real Estate**: Revenues increased by 5% to $406 million, with segment EBITDA up 19% [28] - **Book Publishing**: Revenue rose by 2% to $514 million, with EBITDA increasing by 3% [33] - **News Media**: Revenue decreased by 8% to $514 million, but EBITDA grew by 22% due to cost-saving initiatives [34] Market Data and Key Metrics Changes - Dow Jones digital circulation revenue expanded by 14%, marking the fastest growth rate in almost three years, with total consumer subscriptions surpassing 6 million [11][25] - REA maintained a significant audience lead with nearly four times as many average monthly visits as Domain [14] - News Corp Australia's digital subscriptions reached 1.1 million, with news.com.au achieving 292 million page views per month [18] Company Strategy and Development Direction - The company is focusing on three core pillars for growth: Dow Jones, digital real estate, and book publishing, following the sale of Foxtel [7][22] - Continuous exploration of structural options to maximize shareholder returns is emphasized, with a commitment to quality journalism amid political challenges [9][62] - The company aims to enhance its digital offerings and capitalize on the growth of AI while protecting its intellectual property [10][19] Management's Comments on Operating Environment and Future Outlook - Management believes the current political turbulence is temporary and anticipates robust growth potential in the U.S. economy [5][6] - The company is monitoring economic trends closely and expects the direct impact of tariffs to be immaterial [22] - Future growth is expected to be driven by the professional information business and ongoing cost discipline [35][36] Other Important Information - The sale of Foxtel resulted in a significant reduction of debt on the balance sheet and provided cash for shareholder returns [7][8] - The company has been upgraded to investment grade by Moody's and S&P, enhancing its financial flexibility [8][53] Q&A Session Summary Question: Insights on Dow Jones business investment for the fourth quarter - Management indicated no significant increase in investment, focusing on both consumer and professional information business growth [40][41] Question: Impact of Factiva dispute on margins and future expectations - A smaller impact from the Factiva dispute is expected in the fourth quarter, with ongoing margin expansion anticipated as the professional information business grows [45][48] Question: Capital allocation strategy and potential M&A opportunities - The company is focused on its three core pillars for potential acquisitions and will not overpay for businesses, emphasizing shareholder value [52][53] Question: Simplification of the company structure - Management highlighted the Foxtel deal as an example of their willingness to make significant structural decisions to enhance shareholder value [61][62] Question: Progress on Dow Jones subscriber pricing strategy - The strategy to convert promotional pricing to higher-paying plans is proceeding well, with a 7% increase in total subscriptions driven by digital growth [65][66] Question: Churn impact from moving customers to non-promotional plans - Management is learning about price elasticity and aims to reduce churn while maximizing revenue through advanced AI tools [70]

Financial Data and Key Metrics Changes - Net income from continuing operations increased by 67% to $107 million in Q3 2025 compared to the prior year, while revenues were $2 billion, up 1% despite currency headwinds [6][24] - Total segment EBITDA rose 12%, with overall margin expanding from 13% to 14.4% [6][24] - Adjusted revenues increased by 2%, and adjusted total segment EBITDA grew by 15% [7][24] - Reported EPS from continuing operations doubled to $0.14, while adjusted EPS was $0.17 compared to $0.13 a year ago [7][24] Business Line Data and Key Metrics Changes - **Dow Jones**: Revenue grew by 6% to $575 million, with digital revenue accounting for 82% of total segment revenues [25][26] - **Digital Real Estate**: Revenues increased by 5% to $406 million, with segment EBITDA up 19% [28] - **Book Publishing**: Revenue rose by 2% to $514 million, with EBITDA increasing by 3% [33] - **News Media**: Revenue decreased by 8% to $514 million, but segment EBITDA grew by 22% [34] Market Data and Key Metrics Changes - Dow Jones digital circulation revenue expanded by 14%, with total consumer subscriptions surpassing 6 million [11][25] - REA maintained a significant audience lead, with nearly four times as many average monthly visits as Domain [14] - News Corp Australia's news.com.au achieved 292 million page views per month, making it the number one digital news brand [19] Company Strategy and Development Direction - The company is focusing on three core pillars of growth: Dow Jones, digital real estate, and book publishing, following the sale of Foxtel [7][22] - Continuous exploration of structural options to maximize shareholder returns is emphasized, with a commitment to quality journalism [9][62] - The company aims to enhance its digital offerings and capitalize on the growth of AI while protecting its intellectual property [10][9] Management's Comments on Operating Environment and Future Outlook - Management believes the current political turbulence is temporary and anticipates robust growth potential in the U.S. economy [5][6] - The company is monitoring economic trends closely and expects the direct impact of tariffs to be immaterial [22] - Future growth is expected to be driven by the professional information business and digital revenue streams [35][46] Other Important Information - The sale of Foxtel resulted in a significant reduction of debt on the balance sheet and provided cash for further investments [7][8] - The company has been upgraded to investment grade by Moody's and S&P, enhancing its financial flexibility [8][53] Q&A Session Summary Question: Insights on Dow Jones investment rate for Q4 - Management indicated no significant increase in investment, focusing on both consumer and professional information business growth [38][40] Question: Impact of Factiva dispute on Q4 - A smaller impact from the Factiva dispute is expected in Q4 compared to Q3, with ongoing improvements anticipated [44][46] Question: Capital allocation strategy and M&A opportunities - The company is focused on its three core pillars for potential acquisitions and will not overpay for businesses [51][52] Question: Simplification of the company structure - Management highlighted the Foxtel deal as an example of their willingness to make significant structural decisions for shareholder benefit [57][60] Question: Dow Jones subscriber pricing strategy - The strategy to convert promotional subscribers to higher-paying plans is proceeding well, with a 7% increase in total subscriptions [65][66] Question: Churn impact from pricing changes - Management is learning about price elasticity and aims to reduce churn while maximizing revenue through dynamic pricing strategies [70][71]