What To Expect From News Corp’s Fiscal Q1
News Corp (NASDAQ:NWSA) is scheduled to announce its first quarter fiscal 2018 results on Thursday, November 9. The company reported mixed fiscal Q4 results, as its earnings per share came in ahead of market expectations but revenues missed. In Q4, the company’s revenue decreased 7% year-over-year (y-o-y) to $2 billion, largely on the back of lower print advertising revenues at the News and Information Services segment, and the impact of foreign currency fluctuations. However, this decline was partially offset by continued strong performance at Digital Real Estate Services and the acquisitions of Australian Regional Media and Wireless Group.
Our $15 price estimate for News Corp’s stock is slightly ahead of the current market price.
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The Digital Real Estate segment posted strong growth on the back of higher revenues at both REA Group and Move in the fourth quarter. We expect this trend to continue in the near term, and accordingly expect the company to post strong numbers in the Digital Real Estate segment in the fiscal first quarter as well. However, we also expect the company to post lower overall sales during the quarter, due to a continued downtrend in the News and Information Services segment. In terms of the bottom line, we expect News Corp to continue focusing on fiscal discipline and maintaining strict control over its operating expenses to grow its margins.
The fiscal first quarter is also expected to benefit from increased subscription prices at Dow Jones as well as increased cover prices in the U.K. and Australia. At Fox Sports Australia, the network will face an incremental AUD30 million to AUD40 million in higher rights costs mostly related to the new NRL contract in Q1. Reuters’ compiled analyst estimates forecast revenues of $1.98 billion in Q1 2018.
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