(Reuters) -Rupert Murdoch’s News Corp on Thursday beat quarterly profit estimates thanks to its cost-cutting efforts and talked up how generative artificial intelligence will support future results.
For the first time, digital revenue accounted for over half of the company’s total revenue for the full year, News Corp said.
“That momentum is surely gathering pace in the age of generative AI, which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business,” Chief Executive Robert Thomson said on a conference call.
The company, which also owns the Sunday Times and the Wall Street Journal, was already in active negotiations to establish value for its content and IP “that will play a crucial role in the future of AI,” he said.
Associated Press did a similar deal last month. The news agency said it was licensing a part its archive of news stories to ChatGPT-owner OpenAI under a deal that will explore generative artificial intelligence’s use in news.
Higher digital subscription revenue in its fiscal fourth quarter helped News Corp absorb the impact of a 11.5% decline in advertising revenue.
Revenue in its professional information business, which includes data and analytics platforms such as Oil Price Information Service, rose 10%.
Shares in News Corp, which have risen about 12% so far this year, were little changed in extended trading.
“With inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters,” Thomson said.
New York Times Co and Fox Corp also signaled earlier this week that ad spending was picking up faster than market expectations.
Excluding items, News Corp earned 14 cents per share, beating estimates of 8 cents, according to Refinitiv data.
Core earnings rose 8% to $341 million in the quarter due to cost cuts, including a 5% headcount reduction it had announced earlier.
Total revenue was down 9% at $2.43 billion in the quarter ended June 30.
(Reporting by Chavi Mehta in Bengaluru and Dawn Chmielewski in Los Angeles; Editing by Anil D’Silva and Stephen Coates)
