The 10-second takeaway
For the quarter ended March 31 (Q3), News Corp. beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share dropped. GAAP earnings per share expanded significantly.
Gross margins shrank, operating margins dropped, net margins expanded.
News Corp. reported revenue of $9.54 billion. The 18 analysts polled by S&P Capital IQ predicted revenue of $9.17 billion on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $8.40 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.36. The 20 earnings estimates compiled by S&P Capital IQ anticipated $0.35 per share. Non-GAAP EPS of $0.36 for Q3 were 2.7% lower than the prior-year quarter's $0.37 per share. GAAP EPS of $1.22 for Q3 were 221% higher than the prior-year quarter's $0.38 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.9%, 200 basis points worse than the prior-year quarter. Operating margin was 14.3%, 130 basis points worse than the prior-year quarter. Net margin was 29.9%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $9.37 billion. On the bottom line, the average EPS estimate is $0.43.
Next year's average estimate for revenue is $35.61 billion. The average EPS estimate is $1.65.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 127 members out of 156 rating the stock outperform, and 29 members rating it underperform. Among 54 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give News Corp. a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on News Corp. is outperform, with an average price target of $31.62.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.