News Corp. Earnings Beat Expectations, Raises Share Repurchases

All of Rupert Murdoch’s scandalsand legal woes aren’t hurting the company’s performance.

News Corp.'s headquarters in New York.
Mark Lennihan
News Corp.'s headquarters in New York.

The media giant’s adjusted earnings came in at 37 cents per share, up from 26 cents a year ago, and beating expectations of 31 cents per share, on 2 percent higher revenue than last year of $8.4 billion.

Perhaps an even bigger factor driving the stock higher in after-hours trading: the company announced it is increasing its share repurchase authorization by $5 billion to $10 billion. (Track NWS after-hours here.)

Rupert Murdoch wasn’t on the conference call — instead Chief Operating Officer Chase Carey took the lead. Carey couldn’t ignore the legal issues, saying “we take these issues very seriously” and “the board and I rebuff any notion that [Murdoch] is unfit to run the company.

The cable networks, News Corp.’s biggest division by far, propelled the results higher. Operating income grew 15 percent over a year ago to $846 million.

Higher rates for the domestic networks drive U.S. affiliate revenue up 15 percent, while growth at the Fox International Channels in Latin America and Asia drove international affiliate revenue up 31 percent. In contrast, advertising was stronger domestically — with 10 percent growth, than internationally, where cable saw 7 percent ad growth.

Looking forward, cable advertising scatter pricing is strong, and they expect increases in the “mid-teens,” while local ad trends are softer.

In the current quarter — fiscal fourth quarter — the outlook is not so strong, due to some tough comparisons to the year-ago quarter. The company says to expect the publishing and film segments to both report about $125 million less than a year earlier.

Some good news on digital revenue — the company says digital revenues from Netflix and Amazon over the past nine months has generated $250 million in revenue. Carey danced around questions about digital revenue in the last quarter, just saying in this quarter “we’re probably up $25 million or $30 million from a year ago.”

He stressed that owning content is valuable, and that the company is trying to “capture the value of viewership” whether people are watching on Hulu Netflix, or on TV.

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