News Corporation (ASX: NWS) – News Corp FY2027 First Quarter Earnings

News Corporation reported a sharp increase in profitability for the first quarter of fiscal 2027, with net income jumping 43% to $215 million even as total revenues grew at a more modest 6% to $2.28 billion. The gap between those growth rates signals meaningful operational leverage, with segment earnings before interest, tax, depreciation and amortisation climbing 19% to $403 million. This marks the company’s 14th consecutive quarter of year-over-year profitability improvement, suggesting that the transformation Chief Executive Robert Thomson has been steering is beginning to yield tangible results. Diluted earnings per share rose 45% to $0.29 from $0.20 in the prior year quarter.

The three business segments management has identified as its engines of growth all delivered solid results. Dow Jones generated 8% revenue growth to $630 million, benefiting from higher circulation revenues, particularly in professional information services where Risk and Compliance revenues grew 11%. Total average subscriptions to Dow Jones news products reached 6.9 million, up 8%, with digital-only subscriptions to the Wall Street Journal growing 11% to nearly 4.7 million. Digital revenues now represent 85% of the division’s total, up from 84% in the prior year. Digital Real Estate Services revenues increased 10% to $512 million, driven by a 13% increase at REA A$174.81 ▼ -2.89% Group and a 5% rise at Move. Segment earnings for this division surged 34% despite the modest revenue growth, reflecting the margin expansion Thomson emphasised. Book Publishing delivered 9% revenue growth with segment earnings jumping 29%, supported by strength in general and children’s publishing.

The company’s strategic positioning around artificial intelligence also featured prominently in management commentary. Thomson highlighted that high-quality content is essential to AI applications and expressed satisfaction with agreements already reached with OpenAI and Meta around content licensing. The company indicated it will pursue both commercial partnerships and litigation to protect its intellectual property from other platforms that do not compensate for content. This positioning reflects management’s conviction that News Corp’s vast archive of professional information and news content represents lasting competitive value.

Not everything points in an encouraging direction. The News Media segment, comprising print and digital news mastheads, saw revenues decline 1% and segment earnings fall 40%. Free cash flow turned negative at minus $89 million for the quarter, compared with positive $4 million in the prior year, though management attributed this partly to working capital timing and elevated tax payments. Digital unique users also declined across some key properties, with the Sun’s global monthly users falling to 57 million from 77 million year-on-year and the New York Post reaching 84 million from 94 million, though management noted these declines reflect a strategic shift toward higher-quality engagement metrics.

Investors should monitor whether the three growth engines can sustain their momentum through the remainder of the fiscal year, whether the News Media segment can stabilise, and how free cash flow evolves as working capital movements normalise. The company’s ability to monetise content through licensing arrangements in the artificial intelligence context will also warrant close attention. This announcement is price sensitive and has been flagged as material by the ASX.

View the full ASX announcement (PDF)

About News Corporation Limited (ASX: NWS)

News Corporation Limited is a global media and information services company that creates and distributes content and data products through newspapers, digital platforms, broadcast services, and online channels operating in the United States, United Kingdom, Australia, and other international markets. The company operates through five main segments: Digital Real Estate Services (including its 61%-owned interest in REA Group), Dow Jones, Book Publishing (HarperCollins), News Media (operating mastheads including The Wall Street Journal, The Times, The Australian), and other businesses including Storyful and sports media. It generates revenues from news publishing, financial information services, property listings, book publishing, and digital media subscriptions.