News Corp Must Show Its Record Fourth Quarter Was A Turning Point, Not A Peak

News Corp finished its fiscal year with its fastest growth in four years, and now it has to prove that the acceleration can survive a quarter management itself warned would be harder. Total segment EBITDA growth climbed from 5% to 31% over the course of fiscal 2026, and the tone on the last call was the most confident of the year. Yet the same call came with caveats: a difficult prior-year comparison, Australian property listings turning negative in July, and a softer patch in Dow Jones Energy. The fiscal first-quarter report will show which of those two stories carries more weight.

The Street is looking for earnings of $0.27 per share on revenue of about $2.26 billion. That would be EPS growth of roughly 23% on revenue growth of about 5%, a respectable result that is still a clear step down from the 11% top-line growth posted in the fourth quarter. In other words, analysts have already priced in a deceleration, which is consistent with management's cautious framing. The Earnings Whisper sits right at consensus, so there is no sign of an elevated hidden bar. Management did not issue formal numerical guidance, which leaves the call commentary as the best guide.

The biggest test is whether margin expansion holds as revenue growth cools. Dow Jones delivered a 28.1% margin last quarter, up 310 basis points, helped by a price increase on new WSJ digital subscriptions to $44.99 and the strongest sequential subscriber additions in over two years. Continued ARPU gains and steady digital subscription growth would confirm that the pricing move is sticking rather than driving churn. Energy is the swing factor inside Dow Jones: growth slowed to 4% on Middle East disruption and contract timing, and management pointed to improvement this quarter on the back of a strong pipeline. A rebound there would validate that the slowdown was timing, not demand. Risk and compliance should keep normalizing as acquisition benefits roll off, so a low double-digit pace would be no cause for alarm.

Digital Real Estate carries the most macro exposure. Realtor.com has strung together three straight quarters of double-digit revenue growth and lifted its visit share to 33%, even as unique users fell 6% in a deliberate shift toward higher-value leads. Investors should want evidence that lead quality is translating into revenue despite rising mortgage rates. In Australia, July's 2% drop in new-buy listings is a real headwind, and the question is whether pricing and depth products can offset volume softness. The pending sales of REA India and Moving.com could also make reported comparisons noisier. HarperCollins, coming off 15% growth and its best fourth-quarter EBITDA since fiscal 2018, faces a tough act to follow, so audiobook strength and backlist sales matter. AI licensing, now contributing through the Meta deal, is worth tracking for any sign of additional agreements.

The market has not fully embraced the turnaround. Shares have slipped 3.6% since the last report, trailing the S&P 500 by about three percentage points, even after the strongest quarter in years. Sentiment has nonetheless swung from mildly bearish ahead of the last report to modestly bullish now. At $33.47, the stock trades comfortably above its 200-day moving average of $30.40 and in the middle of its post-earnings range, well short of the $35.76 high, though that entire range sits above the prior quarter's trading band.

The central question is whether News Corp can keep expanding profitability while revenue growth downshifts toward mid-single digits. If Dow Jones margins hold, Energy recovers and real estate absorbs the Australian listings dip, the fourth quarter will look like a new baseline and the larger buyback program will rest on firmer ground. If margins slip alongside revenue, the market's skepticism will look justified.

This earnings preview was originally published on Earnings Whispers.

This article is for informational purposes only and is not investment advice. Earnings Whispers and its staff may hold positions in the securities mentioned. It is AI-assisted, based on proprietary Earnings Whispers data and company reports, and edited by Earnings Whispers staff.