Why did NWS's Q2 2025 results beat expectations?

News Corp.'s (NWS) Q2 2025 results exceeded expectations due to several key factors:

1. Strategic Divestiture: The sale of Foxtel to DAZN Group resulted in a positive impact on News Corp.'s financials. The transaction provided a strategic 6% minority stake in DAZN, along with the repayment of A$592 million in shareholder loans. This move strengthened News Corp's balance sheet and potentially enhanced its earnings per share metrics.
2. Analyst Projections and Revisions: Analysts had projected an EPS of $0.33 per share, representing a 26.9% year-over-year increase. Despite this optimism, the actual EPS surprise was $0.04, indicating that the company's performance exceeded analysts' expectations. This suggests that News Corp's operational performance during the quarter was stronger than anticipated.

3. Organic Revenue Growth: News Corp's revenue by product segments, such as Dow Jones, Book Publishing, Digital Real Estate Services, and News Media, showed positive year-over-year changes. For instance, Digital Real Estate Services saw an 11.8% increase in revenues. This organic growth reflects the company's ability to generate income from its core operations, contributing to the overall earnings beat.
4. Cost Management: News Corp's focus on cost management and strategic investments in content and technology likely played a role in its financial outperformance. The company has been investing in its digital platforms and content creation, which has enabled it to serve more clients effectively. Such initiatives can lead to improved operational efficiencies and better financial returns.

In summary, News Corp's Q2 2025 results surpassed expectations due to strategic divestitures, strong operational performance, organic revenue growth, and effective cost management. These factors combined to deliver a robust financial performance that exceeded analysts' projections.