News Corp posts record quarterly revenues as advertising market rebounds

News Corp has booked its highest quarterly revenues since its entertainment spin-off, on the back of an ad market rebound and digital growth.

Chief executive Robert Thomson said News Corp’s businesses were thriving.

News Corp has recorded its highest quarterly revenues since the 2013 spin-off of the company’s entertainment assets, pushing net income to $US262m ($369m) for the three months ending December 31.

The company — the publisher of The Australian, The Daily Telegraph, The New York Post, The Times of London and the Wall Street Journal — told the ASX on Friday morning that total quarter revenues rose to $US2.72bn, a 13 per cent rise compared to the previous corresponding period.

Earnings rose to $US586m, compared to $US497m in the prior year.

Robert Thomson, News Corp’s chief executive, said the company’s businesses were “thriving, particularly at the digital real estate services, Dow Jones and book publishing segments”.

“There was a pronounced surge in profitability at our news media segment,” he said. “Meanwhile, Foxtel’s streaming products flourished, with a 66 per cent increase in total customers, and Kayo and Binge both exceeded one million.”

ASX-traded stock in News Corp surged on the news, closing up 5.7 per cent on Friday at $33.38.

Earnings from news media rose 68 per cent for the three months to the end of December 31 — to $US111m, compared to $US66m in the prior year.

Earnings at the Dow Jones also rose sharply, up 32 per cent, from $US109m to $US144m, the company said.

The company said revenues in the subscription video services business decreased by 3 per cent, or $US13m, with rises at the Kayo and Binge businesses offset by fewer residential broadcast subscribers.

Foxtel’s total paid subscribers stood at over 3.9 million as of December 31, a 19 per cent increase to the prior year, primarily due to the Binge and Kayo streaming services. There are now over 1 million Kayo subscribers, compared to 648,000 in prior year.

Binge also has more than 1 million subscribers, an increase from 468,000 at the same time in the previous year.

Mr Thomson said while sports seasonality is always a factor in streaming numbers, total streaming has increased by 66 per cent year on year.

“It is worth noting that in addition to the increase in streaming subs, broadcast churn was at a three-year low,” he said.

“The team, led by (chairman of Foxtel, Fox Sports, Sky News and News Corp’s group broadcast director) Siobhan McKenna and (Foxtel CEO) Patrick Delany, is executing successfully on our strategy to scale streaming, having developed world-class technology and a compelling user interface.”

The company said its news media segment, which publishes The Australian, recorded an increase in revenues due to the recovery of the advertising market from pandemic-induced lows, and from higher circulation and subscription revenues.

Advertising revenue rose 17 per cent, or $US42m, driven by “growth in digital advertising across the businesses due to improved yields and higher impressions” and the recovery of print advertising in Britain, primarily at the Times of London and Sunday Times.

In Australia, digital subscriptions across the business rose from 779,000 in the prior year to 909,000.

“Our digital trends are particularly pleasing, which speaks to the value of our global network, and improvements in our understanding of permissioned data,” Mr Thomson said.

“It also reflects the sage leadership of Michael Miller in Australia, Rebekah Brooks in the UK, and both Sean Giancola and Keith Poole at the New York Post.”

Mr Thomson also highlighted that “the landmark agreement with Big Tech continued to benefit our journalism and our bottom line”.

“In addition to the substantial deals with Google and Facebook, we expanded our multi-year global agreement with Apple, which is expected to be an important source of subscriptions and of advertising revenue for our news sites around the world,” he said.