Investing.com - In the midst of a difficult economic environment, News Corp (ASX:NWS) displayed resilience by reporting a better than anticipated 1% rise in revenue to $US2.50 billion in the quarter ending in September.
However, the global media giant experienced a decrease in advertising revenue in its News Media segment, which encompasses its Australian business, negatively impacted by a bolstered US dollar.
News Corp Australia witnessed a 7% slump in revenue to $US238 million, primarily driven by a 5% negative outcome from foreign exchange fluctuations and a drop in both digital and print advertising revenues (down 11%). When adjusted for the robust US dollar impacting Australian earnings, the decrease amounts to a mere 2%.
Digital subscribers at News Corp Australia reached 1,049,000 (937,000 for news mastheads), a climb from 1,012,000 (929,000 for news mastheads) recorded last year.
Robert Thomson, CEO of News Corp, expressed satisfaction with the company's performance stating, “Although some of our markets faced challenging economic conditions, we made a robust start to the new fiscal year, witnessing increased profitability and a surge in revenues.
Our first quarter revenues marginally exceeded at $2.5 billion, while our profitability jumped 4%, marking our second consecutive quarter of profit growth.
Our quarter results affirm the growing disparity between our company's value and our share price, which in our opinion does not accurately reflect our current profitability, let alone the potential of our unrivalled, expanding businesses.
During the quarter, the capabilities of Dow Jones, particularly its professional information business, stood out, where revenues saw a 14% surge, propelled by Risk & Compliance and Dow Jones Energy. Book Publishing reported a massive increase in profitability by 67%, with performance peaking for both the frontlist and backlist.
"We are systematically working towards optimizing our premium content for AI and engaging in advanced discussions that promise considerable revenue for the company in exchange for authorized usage of our matchless content. Our ultimate goal is to amplify value for all our investors, which has led us to rigorously review our structure.”
In terms of Foxtel, revenue dipped by 3% to $US486 million, due to the negative impact from currency fluctuations. After adjustment, revenue saw a marginal gain of 1% to $50.
An elevated revenue stream from Kayo and BINGE, due to increased volume and pricing, was partially counteracted by fewer residential broadcast subscribers.
Revenues from Foxtel Group streaming subscriptions accounted for roughly 30% of total subscription and circulation revenues in the quarter, a rise from 25% in the prior year.
As of September 30, Foxtel’s total closing paid subscribers stood at almost 4.6 million, a rise of 2% in comparison to the previous year, primarily driven by the growth of streaming subscribers on Kayo and BINGE.
Broadcast subscriber churn improved to 11.4% during the quarter, compared to 14.2% in the previous year. Meanwhile, Broadcast ARPU (average revenue per user) for the quarter increased 3% to A$85.