Shares of media conglomerate News Corp. (NWSA) (NWS) rose nearly 4% in premarket trading on Friday after the company reported strong fourth-quarter earnings. Investors also welcomed news that management is considering selling the company’s Australian pay-TV platform, Foxtel.

News Corp.’s revenue rose 6.2% year over year to $2.58 billion in the fourth quarter of fiscal 2024 (ending June 30, 2024), beating estimates of $2.49 billion. At the same time, adjusted earnings per share (EPS) rose 21.4% to $0.17, beating the consensus of $0.16.

NWSA segments deliver impressive growth

The company, founded by Rupert Murdoch, reported solid growth in most of its segments. Revenues at REA Group, the Australian real estate advertising services company and one of the main products of the Digital Real Estate Services segment, rose 37% year-on-year. The same is true of News Corp.’s Book Publishing segment, which HarperCollinsgrew 15% compared to the fourth quarter of fiscal year 2023.

Revenues from the Company’s Subscription Video Services segment (Foxtel Group) and Dow Jones segment (The Wall Street Journal And Barron’s) rose by 1% and 4% respectively. The only negative performer was the News Media segment (News Corp Australia And New York Post), which reported a 5% year-on-year decline in revenue due to falling advertising, distribution and subscription revenues. As shown in the chart below, the News Media division is a key revenue driver for the company.

News Corp. could put Foxtel up for sale

News Corp. is taking several strategic actions to maximize shareholder value and ensure long-term growth prospects for the media company. After seeing third-party interest, the company is considering selling its Australian pay-TV and streaming services business Foxtel Group. Talks are at a very early stage and a sale is not certain.

Foxtel Group reported steady growth in its paid streaming subscribers to 4.7 million as of June 30, supported by solid subscriber growth in both Kayo And BINGE.

In another strategic alliance, News Corp. has signed a multi-year deal with ChatGPT maker OpenAI. The deal gives OpenAI access to all of News Corp.’s current and archived content, while the NWSA takes all necessary steps to prevent AI attackers from illegally confiscating its content.

What is the price target for NWSA?

On TipRanks, News Corp.’s average price target of $35.50 implies 32.6% upside from current levels. Shares have gained 9.5% year-to-date. NWSA stock has a consensus rating of Moderate Buy based on two Buys. These ratings are subject to change as analysts may reconsider their recommendations after the fourth-quarter release.

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