Rupert Murdoch’s News Corp. fell the most in more than five years after the company said it will invest more in its Australian cable network.
On an earnings call Thursday, Chief Financial Officer Susan Panuccio said there will be “some short-term reinvestment required” at the business, called Foxtel, to attract subscribers, as well as added costs associated with a new streaming service and cricket broadcast rights.
News Corp. shares (NWS) sank almost 11 percent to $13.63 in New York, their biggest drop since the company split from Murdoch’s 21st Century Fox Inc. in June 2013, after being down 5.9 percent this year through Thursday. Fox is currently undergoing another breakup, with a plan to sell most of its TV and film assets to Walt Disney Co.
“Despite healthy trends across the board for News Corp., sports costs and ongoing investments in its Foxtel cable network segment for a new sports-streaming product may pressure margins through fiscal 2019,” Bloomberg Intelligence analysts said in a report Friday.
The Foxtel investments overshadowed an otherwise strong fiscal fourth quarter for News Corp. The company posted earnings of 8 cents a share, excluding some items, and revenue of $2.69 billion — both topping analysts’ estimates.
When the two companies split, Murdoch left News Corp. with less-lucrative print properties, which include newspapers and the book publisher HarperCollins. Since then, News Corp. has relied on its digital real-estate business for growth, while trying to reduce its exposure to newspaper advertising by adding more digital subscribers.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and services.
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