News Corp Reports Third Quarter Results for Fiscal 2020
Fiscal 2020 Third Quarter Key Financial Highlights
- Revenues were $2.27 billion, an 8% decline compared to $2.46 billion in the prior year
- Non-cash impairment charges of $1.1 billion, primarily at Foxtel and News America Marketing, led to a net loss of ($1) billion compared to net income of $23 million in the prior year
- Total Segment EBITDA was $242 million compared to $247 million in the prior year
- Adjusted Revenues declined 4% and Adjusted Total Segment EBITDA increased 1%
- Reported EPS were ($1.24) compared to $0.02 in the prior year – Adjusted EPS were $0.03 compared to $0.04 in the prior year
- Completed the sale of News America Marketing to Charlesbank Capital Partners on May 5th
- Dow Jones saw 20% growth in digital-only subscribers to over 2.5 million, including 15% growth in digital-only subscribers at The Wall Street Journal, while experiencing record traffic across its digital networks
New York, NY – May 7, 2020 – News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2020.
Commenting on the results, Chief Executive Robert Thomson said:
“We are operating in a different, difficult time. Every business and family is facing challenges and our thoughts, in particular, are for those who are suffering deeply and personally from the impact of COVID-19.
Our fiscal third quarter results demonstrate the strength of News Corp and the power of our premium content. We also maintained a robust balance sheet, with $1.4 billion in cash and cash equivalents as of March 31st and an untapped $750 million corporate revolving credit facility, providing a strong foundation for the Company’s future.
Despite the onset of COVID-19, and particularly volatile, adverse currency movements, profitability was relatively stable. Notably, profitability was higher at the News and Information Services segment, fueled by significant digital advertising and subscriber growth at Dow Jones, including The Wall Street Journal, which reached approximately 3 million subscribers in the last week, a new record, with over 2.2 million that are digital-only.
The sale of News America Marketing was completed on May 5th and we are continuing to simplify our Company to highlight the intrinsic value of our core businesses, including the strategic review of our Australian newspaper holdings, focusing on our larger brands and our digital reach.
Clearly the pandemic will have an impact on our results in the Fourth Quarter, but all of our businesses are embarking on cost-cutting programs intended to deal with short-term need but also to ensure that the Company is well-equipped to prosper in a decidedly different business environment after the crisis abates.
There will obviously be an impact on executive compensation, and it is worth noting that bonuses are often the largest cash component for our senior executives. ?Pay reductions will be led by our Executive Chairman, Rupert Murdoch, who is voluntarily forgoing his entire cash bonus for the current fiscal year, and as Chief Executive I will forgo 75% of my annual cash bonus. ?The collective cuts in bonuses and other cost initiatives will have a positive impact on profitability and our cash position.”
Third Quarter Results
The Company reported fiscal 2020 third quarter total revenues of $2.27 billion, 8% lower compared to $2.46 billion in the prior year period. ?The decline reflects a $78 million, or 3%, negative impact from foreign currency fluctuations. ?The rest of the decline primarily reflects lower print-related advertising revenues at the News and Information Services segment and lower subscription revenues at Foxtel. ?Adjusted Revenues (which exclude the foreign currency impact, acquisitions and divestitures as defined in Note 2) declined 4%.
Net loss for the quarter was ($1) billion compared to net income of $23 million in the prior year, reflecting $1.1 billion of non-cash impairment charges, primarily related to a write-down of goodwill and indefinite-lived intangible assets at Foxtel and the reclassification of News America Marketing to assets held for sale.
The Company reported third quarter Total Segment EBITDA of $242 million, a 2% decline compared to $247 million in the prior year. ?The decline reflects a $14 million, or 6%, negative impact from foreign currency fluctuations. ?Cost savings at the News and Information Services segment and lower corporate expenses at the Other segment largely offset the revenue decline discussed above. ?Adjusted Total Segment EBITDA (as defined in Note 2) increased 1%.
Net (loss) income per share attributable to News Corporation stockholders was ($1.24) as compared to $0.02 in the prior year.
Adjusted EPS (as defined in Note 3) were $0.03 compared to $0.04 in the prior year.
Please click here for the full Earnings Release information.
About News Corp
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: news and information services, subscription video services in Australia, book publishing and digital real estate services. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: http://www.www.jfdpawn.com.
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