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News Corp beats Street estimates, touts generative AI efforts

Published Nov 09, 2023 04:21PM ET Updated Nov 09, 2023 05:47PM ET
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© Reuters. FILE PHOTO: The logo of mass media and publishing company News Corporation, better known as News Corp, is displayed outside its headquarters in New York City, U.S. March 4, 2023. REUTERS/Chris Helgren/File Photo

 
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By Chavi Mehta

(Reuters) -Media conglomerate News Corp (NASDAQ:NWSA) beat Wall Street targets for first-quarter revenue and profit on Thursday and said it was in advanced talks to strike deals on the use of its content for generative artificial intelligence(AI).

The company's Chief Executive Robert Thomson has been a vocal proponent of having generative AI companies pay for using its content to train their large language models. He has also touted the technology's potential to help reduce costs.

"We are actively working to make the most of our premium content for AI and are engaged in advanced discussions that we expect to bring significant revenue to the company," Thomson said in a statement.

These efforts add to the company's push to improve profitability and grow key assets such as Dow Jones.

Thomson said that News Corp, which is a part of media baron Rupert Murdoch's empire and includes the Wall Street Journal and Sunday Times, is "assiduously" reviewing the company structure.

The company faces renewed activist investor pressure to restructure itself, including a push to spin off some of its assets, following Murdoch's retirement from News Corp and Fox Corp boards in September.

Murdoch is the majority shareholder of a Reno, Nevada-based family trust that owns 39% of News Corp's voting shares.

"Investors clearly do not like (the company structure) as the stock has an estimated 35%-40% conglomerate discount embedded in the current stock price," said Craig Huber, analyst at Huber Research Partners.

Revenue in the quarter ending Sept. 30 was $2.50 billion, compared with estimates of $2.49 billion, according to Visible Alpha. Adjusted profit per share was 16 cents, above estimates of 12 cents.

Revenue at the Dow Jones business grew 4% to $537 million, boosted by a 14% rise in professional data services, while revenue at its Digital Real Estate Services unit, which operates Realtor.com, fell about 4%.

News Corp beats Street estimates, touts generative AI efforts
 

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