News Corporation (NASDAQ:NWS) Q2 2019 Earnings Conference Call - Final Transcript

Feb 08, 2019 • 05:00 pm ET


News Corporation (NASDAQ:NWS) Q2 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the News Corp. Second Quarter Fiscal 2019 Conference Call. Today's conference is being recorded. Media will be on a listen-only basis.

At this time, I'd like to turn the conference's over to Mr. Michael Florin, Senior Vice President and Head of Investor Relations. You may begin, sir.

Michael Florin

Thank you very much, Aaron. Hello, everyone, and welcome to News Corp.'s Fiscal Second Quarter 2019 Earnings Call. We issued our earnings press release about an hour ago, and it's now posted on our website at

On the call today are Robert Thomson, Chief Executive; and Susan Panuccio, Chief Financial Officer. We will open with some prepared remarks, and then we'll be happy to take questions from the investment community.

This call may include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in our earnings release.

With that, I'll pass it over to Robert Thomson for some opening comments.

Robert Thomson

Thanks, Mike. News Corp reported increased profitability and revenue growth during the first half of fiscal 2019, highlighting the power of premium content and authenticated audiences in a fact-changed world that craves credibility. For the second quarter, the company saw 21% revenue growth and a 13% rise in total segment EBITDA, reflecting the consolidation of Foxtel and a healthy expansion of revenues at HarperCollins, Dow Jones and REA Group.

More generally, at News and Information Services, we saw a continuation of positive trends in paid digital subscriptions and digital advertising in Australia and the US where growth mitigated declines in print revenue. Even though our teams have been diligent in pursuing revenue opportunities, the digital world remains somewhat dysfunctional and subject to intensifying scrutiny.

We are in a world of exponential e-evolution in which dominant players have the potential to manipulate markets for data, products, advertising, news and ideas. There is no doubt that some of these companies are arbitraging algorithmic ambiguity and hoping that regulators do not fully appreciate or define their dominance in certain sectors.

When one company controls much of the US consumer audio book market and has its own products in that market and can tweak its algorithm at will, the potential for abuse is almost limitless. It is clear that there has been a regulatory awakening, and the time has come for a regulatory reckoning.

Turning now to our end businesses, which are certainly conscious of their responsibilities as custodians of customer data. It is clear that the ongoing digital transformation of Dow Jones is efficacious. Many traditional media companies are ailing, but that is certainly not the case at the Wall Street