(Reuters) -Media conglomerate News Corp on Thursday beat Wall Street estimates for third-quarter profit, helped by a string of cost-cut measures and strong subscription growth across its professional data and news platforms.
At a time when most media companies are struggling with a tough advertising market, News Corp’s revenue got a boost from its 2021 acquisition of U.S. oil pricing agency Oil Price Information Service to bolster its data and analytics offerings.
Cost-cut measures helped the company combat the impact of inflation and interest rate hikes on the business.
News Corp said it expects to achieve at least $160 million in annualized savings from its previously announced 5% reduction in workforce, or about 1,250 employees. It had earlier forecast at least $130 million in annual savings from the move.
Meanwhile, Chief Executive Robert Thomson spoke about the potential impact of generative AI, which generates new content in response to a user prompt, on the company during a call with analysts on Thursday.
Thomson said the company’s still in the early stages of experimenting with generative AI, with HarperCollins Japan working with the technology and saving “a lot of time.”
AI is not only going to have an impact on content, but will “clearly have a profound impact on the management of the business, whether customer service or billing,” Thomson said.
Shares of the company rose 1.19% to $17.03 after the bell.
Subscription and circulation revenue rose 2.09% in the third quarter ended March 31, as the company’s news outlets such as the Wall Street Journal and the Sunday Times added more subscribers
The company posted revenue of $2.45 billion, compared with analysts’ average estimate of $2.37 billion, according to Refinitiv IBES data.
It reported adjusted profit of 9 cents per share, compared with analysts’ average estimate of 5 cents per share.
(Reporting by Akshita Toshniwal, Chavi Mehta and Aishwarya Nair in Bengaluru; Additional reporting by Dawn Chmielewski in Los Angeles and Helen Coster in New York; Editing by Shounak Dasgupta and Shinjini Ganguli)
