News (US:NWS)2023-02-10 01:32Financial Data and Key Metrics Changes - Total revenues for the second quarter of fiscal 2023 were over $2.5 billion, down 7% year-over-year, with a $171 million or 6% negative impact from foreign currency headwinds [70] - Adjusted earnings per share were $0.12 compared to $0.40 in the prior year, reflecting lower total segment EBITDA and higher costs [52] - Total segment EBITDA was $409 million, 30% lower compared to the prior year's record profits [52] Business Line Data and Key Metrics Changes - Dow Jones revenues were $563 million, up 11% year-over-year, with digital revenues accounting for 76% of total revenues, a 4 percentage point increase [54] - Digital Real Estate Services segment revenues were $386 million, down 15% year-over-year, impacted by macroeconomic pressures [71] - Foxtel's total paid subscribers reached over 4.3 million, up 10% year-over-year, with paid streaming subscribers increasing 25% [12] Market Data and Key Metrics Changes - REA revenues were $240 million, down 16% on a reported basis, including a 9% negative impact from foreign exchange [25] - The Times and Sunday Times saw advertising revenues down 13%, but down 3% in constant currency [57] - Digital advertising accounted for 59% of total advertising revenues, improving 3 percentage points from last year [55] Company Strategy and Development Direction - The company is committed to a 5% reduction in workforce to manage costs amid macroeconomic challenges, aiming for annualized savings of at least $130 million [102] - Focus on digital expansion and simplification, with ongoing integration of recent acquisitions like OPIS and CMA to enhance revenue and profits [64][94] - The potential sale of Move is being considered to maximize shareholder value while strengthening realtor.com's competitive position [10][64] Management's Comments on Operating Environment and Future Outlook - Management noted that macro trends, including inflation and interest rates, continue to impact business performance, particularly in Digital Real Estate and Book Publishing [63][70] - There is confidence in the company's ability to navigate these challenges through prudent cost management and strategic investments [9][64] - Future profitability is expected to stabilize, particularly in the Foxtel Group, with ongoing focus on digital services and content offerings [59][66] Other Important Information - The company reported a significant increase in digital subscriptions, with total Dow Jones subscriptions surpassing 5 million for the first time [6] - HarperCollins faced challenges due to sluggish consumer demand, leading to a 14% decline in revenues [53] - The company remains committed to a $1 billion share buyback and dividend program [9] Q&A Session Summary Question: What is the impact of the 5% headcount reduction across the company? - The 5% reduction will apply across all businesses, with expected savings of at least $130 million annualized [102] Question: How does the potential sale of Move affect REA's value? - REA is considered a core part of the portfolio, and its market cap is significant, indicating its value independent of Move [102] Question: Can you quantify the impact of Amazon on Book Publishing? - The impact from Amazon was slightly lower in Q2 compared to Q1, with patterns returning to normal levels in January [103] Question: What are the strategies for advertising in the Subscription Video Services segment? - The company is launching an advertising tier for BINGE, expecting modest uptick in revenue from this initiative [112] Question: What is the outlook for the Digital Real Estate Services segment? - The property market is expected to improve as interest rates stabilize, with new campaigns launched to drive traffic to realtor.com [68]