News Corp. Sees 7% Revenue Drop In Q2, Plans 5% Workforce Cut

News Corp. experienced a 7% decrease in Q2 revenues YoY, for a total of $2.52 billion.

The falloff was largely due to a $171 million, or 6%, negative impact from foreign currency fluctuations, lower revenues at the Book Publishing and the Digital Real Estate Services segments.

The decline was partially offset by higher Dow Jones revenues.

Net income totaled $94 million -- a 64% decline vs. $262 million in the same quarter last year. The company attributes this drop to lower total segment EBITDA, which fell 30% to $409 million, mostly due to higher costs at the Dow Jones segment. 

“Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses,” says Chief Executive Robert Thomson. “But we believe these challenges are more ephemeral than eternal.” 

Thompson adds: “Just as our company passed the stress-test of the pandemic with record profits, the initiatives now underway, including an expected 5% headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth.” 

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On a positive note, total average subscriptions to Dow Jones’s consumer products grew by 5% to 4.9 million. Digital-only in that area grew by 10%.

Thompson reports that in recent weeks, total Dow Jones subscriptions sold passed the 5M mark for the first time.

Digital-only subscriptions to The Wall Street Journal grew 9% to over 3.1 million, representing 84% of total Wall Street Journal subscriptions. 

Total Dow Jones revenues increased $55 million, or 11%, compared to the prior year. This included $36 million and $18 million contributions from the acquisitions of OPIS and CMA, respectively. 

Adjusted revenues increased 1% compared to the prior year, due primarily to the growth in circulation and digital subscription revenues.

Meanwhile, the company has been in active discussions with CoStar Group about a potential sale of Move. This would be designed to create shareholder value and strengthen Realtor.com’s competitive position, the firm says. 

Move’s revenues in the quarter slipped by 14% YoY to $146 million, mostly as a result of lower real-estate sales.

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