News Corp. Earnings: Beats Wall Street on Profit Rise

S&P 500 (NYSE:SPY) component News Corporation (NASDAQ:NWSA) reported net income above Wall Street’s expectations for the first quarter. News Corp. is a global media company with operations in film, television, cable programming, satellite television, magazines, and book publishing.

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News Corporation Earnings Cheat Sheet

Results: Net income for the newspaper publishing rose to $2.23 billion (94 cents per share) vs. $738 million (28 cents per share) in the same quarter a year earlier. This is a more than threefold rise from the year-earlier quarter.

Revenue: Rose 2.2% to $8.14 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: News Corporation reported adjusted net income of 43 cents per share. By that measure, the company beat the mean estimate of 37 cents per share. Analysts were expecting revenue of $8.24 billion.

Quoting Management: “Our operational discipline and focus on innovation continued to drive the company’s momentum in our fiscal first quarter, led by double-digit growth in our channels business and the global success of our film and television content. Even against considerable currency headwinds due to a stronger dollar, we were able to increase News Corp’s revenue and adjusted segment operating profit over the prior year quarter while continuing to make key investments to position us for future growth. We are committed to leading the change that the marketplace and our customers demand as the Company builds on its success at leveraging multi-platform opportunities for our content. We believe that our ability to do so will be enhanced by the flexibility and management focus that will result from the proposed separation of our entertainment and publishing businesses. We have made considerable progress in this process and look forward to providing more details by the end of the calendar year.”

Key Stats:

The company beat estimates last quarter after being in line with expectations in the fourth quarter of the last fiscal year with net income of 32 cents per share.

Margins increased in the fourth quarter of the last fiscal year after dropping the quarter before. Gross margins grew to 40.4%, up 0.1 percentage point from the year-earlier quarter. In the third quarter of the last fiscal year, the figure rose 0.2 percentage point to 37.5% from the year earlier quarter.

Over the last five quarters, revenue has increased 1.4% on average year-over-year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose 7.2% from the year-earlier quarter.

The company reported a profit last quarter, following a quarter of being in the red. The company booked a net loss of $937 million, or 38 cents per share, in the third quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 46 cents a share to 44 cents over the last ninety days. At $1.67 per share, the average estimate for the fiscal year has fallen from $1.71 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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