NEWS CORPORATION.. (NASDAQ:NWS) Q1 2019 Earnings Conference Call - Final Transcript

May 10, 2019 • 05:00 pm ET


NEWS CORPORATION.. (NASDAQ:NWS) Q1 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the News Corp Third Quarter Fiscal 2019 Conference Call. Today's conference is being recorded. Media will be on a listen-only basis. At this time, I would like to turn the conference over to Mike Florin. Please go ahead, sir.

Mike Florin

Thank you very much, Todd. Hello, everyone and welcome to News Corp's fiscal third 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'll 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 reaped rewards from our digital strategy this quarter, underscored by a robust rise in digital subscriptions across our media properties, a sharp increase in digital audiobook sales and continued expansion at our digital real estate businesses despite volatile conditions in property markets. In the third quarter, the company saw 17% revenue growth to nearly $2.5 billion, reported net income of $23 million versus a $1.1 billion net loss in the prior year. And there was a 36% increase in total segment EBITDA. These results reflect the consolidation of Foxtel and among other things, another distinguished performance by HarperCollins. For the nine months to the end of March, our revenues were 20% higher and profitability was 29% higher.

Turning first to the News and Information Services segment, where Dow Jones continues to expand its national and global digital reach. We have recently entered into a partnership with Apple, which is at an early stage, but the initial signs are encouraging both in terms of reaching new audiences and the strength of engagement with The Wall Street Journal in the new app. The Journal is the most trusted masthead in America and that value can be seen in its results this quarter, with paid digital-only subscribers of the Journal growing to nearly 1.8 million, reflecting 19% growth. In total, 68% of subscribers are now digital-only.

Equally as significant, in the last quarter, about 55% of circulation revenues at Dow Jones were digital, and we believe there is undoubted potential for future growth. In addition to The Journal, other noteworthy Dow Jones properties include Barron's and MarketWatch. At MarketWatch, audience expanded 13% in the first nine months to approximately 30 million average monthly unique users and