News Corp Distances Itself From Ailing Print

News Corp is undergoing its most radical change since the split of June 2013 as digital subscriptions in newspaper and from the newly merged Foxtel/Fox Sports business becomes the most important revenue and profit driver, supported by the company’s growing digital real estate operations in Australia and the US.

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Change Aplenty At News Corp

A lot of action around News Corp over night and this morning as the anti takeover poison pill protection was extended for three years, a 10 cents a share semi annual dividend was revealed, job cuts announced at the Wall Street Journal and a change in senior management in Australia.

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Are News Corp, REA Making The Right Move?

News Corp (NWS) and REA Group ((REA)) will partner to acquire US online real estate classifieds business, Move Inc, for US$950m. This is the largest investment News Corp has made since it split from Fox. The deal is cash funded and split 80:20 between News Corp and REA. Move is considered the number three real estate portal in the US market in terms of traffic but has delivered the slowest revenue growth of the three. Citi observes the 3-year compound growth rate of just 6% compares with Zillow’s 44% and Trulia’s 57%. Zillow and Trulia are planning to merge and Citi also notes other real estate markets are also trending towards two major digital players, e.g. Rightmove/Zoopla in the UK and REA/Domain in Australia.

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News Corp: Result 2014

The message was loud and clear from News Corp at its full-year results presentation last week: the US$3.1bn on its balance sheet isn’t going anywhere any time soon – or at least not to shareholders. Asked twice – quite pointedly as these things go – about whether the company would consider buybacks or a dividend, it was left to chief financial officer Bedi Singh to respond with the usual cookie-cutter platitudes about ‘making sure [its] businesses are stabilised’, looking at ‘internal investments’ and ‘making sure we do smart strategic acquisitions’.

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NWS – Citi rates the stock as Buy

News Corp’s result was in line with expectation but highlighted operational challenges ahead in FY15, the broker suggests, in which there is limited scope for organic growth. FY15 will be a further year of transition and restructuring, and the broker is not convinced newspaper advertising revenues are heading anywhere but south.

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NWS – Citi rates the stock as Buy

Citi is adjusting operational forecasts in the wake of the third quarter results. The broker increases core profit estimates by 24% for FY14, largely because of cost initiatives. Citi expects net income to double by FY16 as newspaper earnings stabilise, digital assets grow and investment expenditure rolls off.

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Print Weighs On News Corp Profit

The strong result we reported this week from REA Group, 62% owned by News Corp, plus a full three months contribution from Fox Sports Australia, helped turn the December quarter results for Rupert Murdoch’s other company from a nasty slide, into a merely hiccup caused mostly by another poor quarter for the group’s struggling Australian newspapers.

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