News Corp’s Q3 Earnings Show Strategic Resilience Amid Mixed Segment Performance

News Corp’s third-quarter results underscore a company navigating both opportunities and challenges in its core segments. While total revenue grew modestly to $2.01 billion, the 67% surge in net income and a 31% increase in adjusted EPS to $0.17 highlight operational discipline and strategic moves like the sale of Foxtel. But beneath the headline figures lies a story of uneven performance across divisions, with Dow Jones and Digital Real Estate driving growth while News Media struggles.

The Dow Jones Engine

The star of the quarter was Dow Jones, which reported 6% revenue growth to $575 million, driven by soaring subscriptions and its professional information business. Digital subscriptions for The Wall Street Journal rose 3% to 4.3 million, but the real growth came from Risk & Compliance and Energy divisions, which jumped 11% and 10%, respectively. Acquisitions like Oxford Analytica bolstered its data capabilities, a critical edge as clients demand AI-driven insights. EBITDA at Dow Jones rose 12% to $132 million, though rising tech and marketing costs tempered margins.

Digital Real Estate: Riding Australia’s Property Market

Digital Real Estate Services (Dow Jones’ second-largest division) grew 5% to $406 million, fueled by REA Group’s 6% revenue increase in Australia and India. The sale of Foxtel also freed capital to reinvest in this segment. However, Move’s U.S. business faced headwinds, with Realtor.com lead volumes down 17% due to high mortgage rates. Still, EBITDA here jumped 19% to $124 million, reflecting cost controls and stronger margins.

Book Publishing: A Steady, if Modest, Performer

Book Publishing eked out 2% revenue growth to $514 million, with audiobooks and backlist sales (now 65% of consumer revenue) supporting HarperCollins’ performance. Key titles like Wicked and The Strawberry Patch Pancake House contributed, but rising employee costs capped EBITDA growth at 3%. The division’s 25% digital revenue mix lags behind peers, suggesting room for improvement.

News Media: Struggling but Getting Lean

The News Media segment fell 8% to $514 million, hit by declining print ad revenue and the transfer of third-party printing contracts. While digital subscribers in Australia grew to 1.15 million, The Sun and New York Post saw steep drops in digital users—a sign of shifting reader preferences. Still, EBITDA improved 22% to $33 million thanks to cost cuts, including reduced expenses for talk shows.

Balance Sheet Strength and Strategic Shifts

The Foxtel sale—completed in April—repaid $592 million in debt and secured a 6% stake in DAZN. This moved News Corp’s net debt to $1.94 billion, down from prior levels, while free cash flow for the first nine months rose 13% to $539 million. CEO Robert Thomson framed the results as proof of the company’s focus on “digital growth, cost discipline, and intellectual property value.”

Conclusion: A Company Split Between Innovation and Legacy

News Corp’s Q3 results reveal a company split between its forward-looking divisions and its traditional media businesses. Dow Jones and Digital Real Estate are capitalizing on data-driven demand and geographic diversification, while News Media’s decline reflects broader industry headwinds. The 31% EPS growth and 15% adjusted EBITDA expansion signal that cost controls and strategic divestitures are working.

Investors should note, however, that risks remain. The Move division’s lead volume drop foreshadows challenges in a cooling housing market, and News Media’s reliance on cost cuts over revenue growth is unsustainable long-term. Still, with $2.09 billion in cash and a 6% free cash flow margin, News Corp is well-positioned to weather these headwinds.

The sale of Foxtel and the focus on high-margin segments like professional information services suggest management is doubling down on areas with defensible moats. If Dow Jones can sustain its 12% EBITDA growth and Digital Real Estate’s margins hold, News Corp’s 2025 EPS guidance of $0.65–$0.70 (up from $0.42 in 2024) may prove conservative. For investors, this is a story of resilience—but one that hinges on digital reinvention in an era where “the currency of credibility” is harder to mint than ever.