News Corp shares gain as Q1 costs control impresses analysts
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More news: News Corp shares lifted at market open after the media group reported a 3% rise in first-quarter revenue.
News Corp shares were up 2.2% to $48.24 by 10:40am AEDT, having added nearly 30% since January.
UBS analyst Lucy Huang said News Corp's Q1 result was in line with market estimates, with stronger-than-expected costs control.
The group's book publishing segment was the "key outperformer", according to Huang, with EBITDA beating consensus forecasts by 13%, while corporate costs came in $9 million better than expectations.
The "key underperformer" was digital real estate, with News Corp's US real estate platform Move falling short of forecasts.
What they said: "Overall, while cost control has been positive, we still wait for macro to drive broader re-rate across the business," said Huang.
News Corp reports 3% rise in Q1 revenue
The news: News Corp reported a 3% rise in first-quarter revenue, driven by growth in its book publishing, real estate services and Dow Jones segments.
The company also announced that its chief financial officer Susan Panuccio will step down from her role in January 2025 and will be succeeded by Lavanya Chandrashekar.
The numbers: News Corp posted Q1 revenue of $2.58 billion, up 3% compared to the previous year.
Net income of $144 million during the quarter jumped from $58 million year on year. Total segment EBITDA grew 14% from $364 million to $415 million.
The context: News Corp said revenue growth was driven by higher Australian residential revenue at its real estate platform REA Group, higher digital book sales and improved returns at its book publishing segment, and continued growth in the professional information business at its Dow Jones segment.
The company noted that growth was partly offset by a 5% fall in revenue at its news media segment.
News Corp also noted that Dow Jones and the New York Post have started proceedings against "the perplexing Perplexity", a US artificial intelligence startup backed by Amazon founder Jeff Bezos and chip maker Nvidia.
News Corp CEO Robert Thomson said that Perplexity is selling products based on the media group's journalism, and that News Corp is "diligently preparing for further action against other companies that have ingested our archives and are synthesising our intellectual property."
What they said: "That we have achieved these record first quarter results in macro-conditions which are far from auspicious is compelling evidence of the successful transformation of News Corp over the past decade," Thomson said.
"Meanwhile, the just-completed election has highlighted the importance of trusted journalism in a media maelstrom in which some journalists mistake virtue signalling for virtue.
"Artificial intelligence recycles informational infelicities and it is critical that journalistic inputs have integrity, which is why our partnership with Open AI is so crucial and why we intend to sue AI companies abusing and misusing our trusted journalism."
The sources: ASX announcement, ASX announcement
