News Corp Reports Third Quarter Results for Fiscal 2018

News Corp Reports Third Quarter Results for Fiscal 2018

Fiscal 2018 Third Quarter Key Financial Highlights

Revenues of $2.10 billion, a 6% increase compared to $1.98 billion in the prior year, with growth in every segment

Net loss was ($1.1) billion compared to nil in the prior year. The loss includes non-cash impairment charges and write-downs of $1.2 billion

Total Segment EBITDA was $182 million compared to $215 million in the prior year

Reported EPS were ($1.94) compared to ($0.01) in the prior year - Adjusted EPS were $0.06 compared to $0.07 in the prior year

Digital Real Estate Services segment revenues grew 27%, benefiting from product innovation and improved yield at both REA Group and realtor.com

Digital revenues represented 29% of News and Information Services segment revenues, compared to 24% in the prior year, reflecting strong paid digital subscriber growth at mastheads

Completed the transaction to combine Foxtel and FOX SPORTS Australia in April 2018, with the Company holding 65% of the combined company

New York, NY - May 10, 2018 - News Corporation ( News Corp or the Company ) (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2018.

Commenting on the results, Chief Executive Robert Thomson said:

We finished the fiscal third quarter with strong revenue growth, led by outstanding performances at our Digital Real Estate Services and Book Publishing segments. Revenues this quarter improved by 6 percent and are up 4 percent for the first nine months of this fiscal year.

We welcome Foxtel to our corporate family. We believe the company is uniquely positioned, given its potential in a rapidly expanding OTT market, with unrivaled sports offerings and premium entertainment and news content. From the fourth quarter, the combination of digital real estate services and pay-TV businesses will account for more than half of our profits and significantly increase recurring subscription-based revenues.

The third quarter once again highlighted the strength of our global digital real estate platform. The segment posted robust 27 percent growth in revenues, as both REA Group and realtor.com benefited from product innovation and higher yields while becoming more holistic sites for home buyers and sellers.

At our mastheads, digital audience expanded at a time when premium news has become more important to readers and advertisers. The Wall Street Journal, The Times and Sunday Times, and The Australian reported average growth in digital subscriptions of more than 20 percent for the quarter, a testament to the success of their digital transformation.

Reported earnings in the third quarter were affected by a non-cash write-down of our investment in Foxtel, as we previously disclosed in March, and non-cash impairment charges, mostly related to News America Marketing.

The digital eco-system is clearly evolving and regulators in many countries are grappling with the profound impact of unprecedently powerful digital platforms. There is no doubt that governments should create an Algorithm Review Board to oversee these historically influential digital platforms and ensure that there is no algorithmic abuse or censorship, commercially or politically.

Third Quarter Results

The Company reported fiscal 2018 third quarter total revenues of $2.10 billion, a 6% increase compared to $1.98 billion in the prior year period, reflecting strong growth in the Digital Real Estate Services and Book Publishing segments and a $70 million positive impact from foreign currency fluctuations. The growth was partially offset by lower print advertising and News America Marketing revenues at the News and Information Services segment. Adjusted Revenues (which exclude the foreign currency impact and acquisitions and divestitures as defined in Note 1) increased 2%.

Net loss for the quarter was ($1.1) billion as compared to nil in the prior year. The loss was primarily driven by non-cash write-downs of $998 million related to Foxtel and FOX SPORTS Australia, as well as a non-cash impairment charge of $165 million at News America Marketing.

The Company reported third quarter Total Segment EBITDA of $182 million, a 15% decline compared to $215 million in the prior year, driven by an increase in expenses at the Cable Network Programming segment as a result of the timing of programming amortization related to the launch of a dedicated National Rugby League ( NRL ) channel and higher NRL sports programming rights costs, higher expenses at News UK and the absence of the prior period's adjustment to the deferred consideration accrual related to the Unruly acquisition. Adjusted Total Segment EBITDA (as defined in Note 1) decreased 18%.

Loss per share available to News Corporation stockholders was ($1.94) as compared to ($0.01) in the prior year.

Adjusted EPS (as defined in Note 3) were $0.06 compared to $0.07 in the prior year.

Please click here for the full Earnings Release information

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About News Corp

News Corp (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers throughout the world. The company comprises businesses across a range of media, including: news and information services, book publishing, digital real estate services, and cable network programming and pay-TV distribution in Australia. Headquartered in New York, the activities of News Corp are conducted primarily in the United States, Australia, and the United Kingdom. More information: http://www.newscorp.com.

Contacts

News Corp Investor Relations

Michael Florin

212-416-3363

mflorin@newscorp.com

News Corp Corporate Communications

Jim Kennedy

212-416-4064

jkennedy@newscorp.com

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