What Happened
The share price of News Corp. (NWSA -0.02%) was up on Tuesday on a day that was otherwise a dreary one for the market. The media company saw its price surge 15% higher at the opening bell to over $20 per share, but by 3 p.m. ET it had fallen back to around $18 per share -- still up 4.7% on the day.
News Corp was fueled by a strong earnings report, released at the close of the market on Monday.
So what
News Corp is a media company with five different business lines, including news media (The Wall Street Journal, Barronʻs, New York Post, among others); book publishing (HarperCollins); digital real estate services (Realtor.com); Dow Jones & Co.; and subscription video services. It was founded by Rupert Murdoch, who also founded Fox Corporation. (FOX 2.05%), which runs Fox News, among other properties.
News Corp released its fiscal fourth-quarter and fiscal-year 2022 annual earnings on Monday, and it posted record revenue and earnings. Revenue was up 11% for the fiscal year to $10.4 billion, while net income almost doubled to $760 million from $389 million the previous fiscal year. Q4 revenue was $2.7 billion, up 7% year over year, while net income was $127 million, up from a net loss of $15 million a year ago.
Dow Jones posted a 26% increase in revenue in the quarter and an 18% increase for the full fiscal year. It posted its highest ever revenue number, $2 billion, since News Corp acquired it. Circulation and subscription revenue was up 17% for the fiscal year, while advertising revenue was up 20% for the fiscal year, buoyed by the acquisitions of Investorʻs Business Daily, Oil Price Information Service (OPIS), and Chemical Market Analytics.
Now what
Digital real estate services was the biggest gainer in the quarter ended June 30, with revenue up 25% year over year to $1.7 billion, while revenue for book publishing and news media was up 10% each, year over year. Among its media properties, The Wall Street Journal saw total subscriptions rise 8% in the quarter, with digital-only subscriptions jumping 14%. The only segment of the business that saw revenue decline both in the quarter and for the fiscal year was subscription video services, down 2% in the quarter and 3% for the fiscal year.
News Corpʻs stock price is down 18% year to date, but the consensus price target is $26.50 per share, which would represent a 45% increase over the current level. It has a forward price-to-earnings (P/E) ratio of 18, down from 41 at the end of fiscal year 2021.
