How Are News Corp’s Revenue And EBITDA Trending?
News Corp’s revenue fell by 3% over the last five years, due to the industry-wide shift from print media to digital. However, operating expenses declined 4% in the last five years, owing to lower SG&A expenses, which declined due to a decrease in severance costs (workforce reduction) and lower distribution costs. Consequently, the company’s EBITDA rose by 2% as lower revenues were offset by a decline in costs.
Going forward, we expect the revenue declines to continue, even as the company makes strides to return to profitability. Moreover, we expect a majority of the growth in the long term to come from the company’s digital real estate segment. If News Corp fails to maintain a strict control over its expenses, the EBITDA will most likely deteriorate.
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