News Corp Forecasts Revenue Growth Amid Market Challenges

A recent report indicates that News Corp's stock could see further gains despite underperforming the market. While revenues grew, some segments are facing declines, raising questions about its future performance amidst economic uncertainty.

Date: 07-10-2024

AI Rating: 6

The report outlines a mixed performance for News Corp, highlighting a 2% year-over-year revenue growth to $10 billion. However, it underperformed in comparison to the S&P 500, which rose approximately 20% during the same timeframe. The adjusted earnings per share (EPS) improved significantly, showing a 43% increase to 70 cents, which indicates that profitability is on the upswing despite revenue challenges.

Segments within the company reveal contrasting trends. The Subscription Video Services and News Media segments reported declines in revenue, with the Subscription Video Services down 1% and the News Media segment down 4%. Advertising revenue issues and a challenging housing market are significant factors impacting these segments, which could lead to concerns for investors regarding future profitability.

Nevertheless, the company anticipates continued growth from its other segments, particularly the REA Group, driven by a 12% increase in Australian residential new buy listings for July. This growth trajectory may provide a buffer against declines in other areas of the business. Furthermore, News Corp expects revenues to reach $10.4 billion in fiscal 2025, marking a 3% increase year-over-year.

The expected growth in earnings per share has been revised to 87 cents, suggesting a potentially favorable trend when compared to current stock performance. The projected valuation of $30 per share based on these estimates indicates that the stock may still hold value for investors amid volatility.

Stocks: NWSA