News Corporation (ASX: NWS)
Improving financial metrics: Diversified media and information services company, News Corporation provided its FY2018 second quarter earnings result and reported for narrowing the net loss for the quarter to ($66) million, which is an improvement of 70%, over ($219) million in 2017. Thus, in the six months ended December 31, 2017, NWS loss narrowed to $US16 million ($20.5 million) from a $US305 million shortfall in the year earlier period. The group primarily benefitted from the absence of a pre-tax non-cash impairment charge related to fixed-assets of $310 million and a $227 million pre-tax non-cash write-down of the Foxtel investment in the prior year period.
For the second quarter of fiscal 2018, revenues of $2.18 billion were up 3% compared to $2.12 billion in the prior year with digital Real Estate Services segment revenues growing 21%. Particularly, the group reported for strong paid digital subscriber growth at key news mastheads, led by The Wall Street Journal with a 29% increase in its digital-only subscribers to approximately 1.4 million. While the total segment EBITDA of $329 million was 1% up over the prior year, a charge of $174 million was recorded related to the recently enacted U.S. Tax Cuts and Jobs Act. Meanwhile, loss per share available to News Corporation stockholders was ($0.14) as compared to ($0.50) in the prior year.
Also, net cash provided by continuing operating activities improved $200 million for the six months ended 31 December 2017 as compared to the prior year period. On the other hand, group’s advertising revenues declined 6% compared to the 2017 figure at the back of lower home delivering revenues of $37 million at News America Marketing primarily due to two fewer free-standing inserts and a decline in custom publishing revenues. At the back of the quarterly result, NWS’ first half revenues were up 4% and profitability improved by 27%. Total earnings before interest, tax, depreciation and amortisation were up to $US578 million from $US455 million in the year-earlier period. Despite the decent result, the stock looks “Expensive” at the current price of $20.51
REA Group Limited (ASX: REA)
Gaining more strength: Edging up by 2% on February 09, 2018, REA Group Limited’s (ASX: REA) results for the half-year ended 31 December 2017 were out and signified strong revenue growth of 21% on the prior year to $406.8m, with an increase in EBITDA of 21% to $242.8m. The group’s Australian business drove the revenue with 21% increase. The group also benefitted from the inclusion of Financial Services revenue for the first time that witnessed more than 5.3 million calculator engagements since launch. First settlements of realestate.com.au home loans contributed to growth. Realestate.com.au remains to be the number one place for property, with more than twice the visits of REA’s nearest competitor across all platforms.
Australia’s market of lower new dwelling commencements did not impact the business much, while total residential listings were marginally down during the half with growth in listings seen only in the key markets of Melbourne and Sydney. Fewer project launches were kind of balanced by more positive residential listings mix. Overall, Australian premium listing products have delivered outstanding growth. Nonetheless, group’s operating expenses increased due to the inclusion of Financial Services, product innovation and investment in marketing. Despite challenging environment in Asia, revenue and EBITDA growth was witnessed due to MyFun, Thailand and Indonesia (inclusive of FX impact) and continued investment resulted in strong audience growth. With group expanding in all fronts, we put a “Hold” at the current price of $72.97
Half year results (Source: Company Reports)
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