News Corp, the media conglomerate led by Rupert Murdoch, exceeded analyst estimates for fourth-quarter revenue and profit, driven by robust growth in its Dow Jones unit and strong performance in its real estate listings and book publishing businesses. The company's shares surged by 4% in after-hours trading following the announcement.
The company's strong performance was fueled by the continued growth of its business information unit, Dow Jones, which houses publications such as The Wall Street Journal, Barron's, and Market Watch. Dow Jones's revenue climbed by 4% to $566 million, driven by a surge in circulation and subscription revenue. This growth reflects the ongoing shift towards digital subscriptions and the increasing demand for reliable financial and business news.
Furthermore, News Corp's real estate listings business experienced a significant upswing. REA Group, a major subsidiary of News Corp that operates residential and commercial property websites in Australia, witnessed a 37% increase in revenue to $305 million during the quarter. The rise was attributed to price increases and an increase in national listings.
News Corp's book publishing division, which includes HarperCollins, also contributed to the company's success. Revenue from this unit climbed by 15% due to higher sales of both physical and digital books. The growth in the book publishing sector reflects a continued interest in traditional media formats alongside the increasing popularity of audiobooks.
Despite the positive performance across several segments, News Corp's news media unit, which encompasses News Corp Australia, News UK, and the New York Post, faced challenges. Revenue declined by 5% due to lower advertising, circulation, and subscription revenues. This dip reflects the ongoing struggles of the traditional print media industry in the face of digital disruption.
The company's overall revenue rose by 6% to $2.58 billion in the quarter ended June 30, surpassing the estimated $2.49 billion. News Corp's adjusted profit per share reached 17 cents, beating the anticipated 16 cents.
News Corp's CEO, Robert Thomson, highlighted the company's strategic partnership with OpenAI, the artificial intelligence research company behind ChatGPT. The deal, which could be worth more than $250 million in cash and credits, will allow OpenAI to utilize News Corp's extensive news content to power its AI models and answer user inquiries. This partnership underscores the company's commitment to leveraging technological advancements to enhance its offerings and maintain its relevance in the evolving media landscape.
Thomson also emphasized the company's ongoing review of its portfolio to optimize returns for shareholders. This review has recently been accompanied by interest from third parties in a potential transaction involving Foxtel, News Corp's Australian-based subscription television provider. While the company is not actively seeking to sell Foxtel, it is exploring strategic and financial options to maximize value.
The fourth-quarter earnings report reflects News Corp's ability to navigate the evolving media landscape and capitalize on the growth of digital platforms. The company's performance suggests a continued focus on strategic partnerships, technological innovation, and a commitment to providing high-quality content that resonates with diverse audiences. As the media industry continues to reshape itself, News Corp's ability to adapt and leverage its strengths will determine its future trajectory.
