News Corp Earnings Beat: Record Q4 Profit Meets a Stalled Stock

A blowout quarter, a muted reaction

News Corp ended fiscal 2026 with the strongest quarter in its history as a stand-alone company. The bigger story is that the result has not moved the stock much. For the three months to June 30, the publisher of The Wall Street Journal reported revenue of $2.34 billion. That was up 11% from $2.11 billion a year earlier. Net income from continuing operations rose 167% to $230 million, from $86 million.3 Adjusted earnings per share came in at $0.35, up from $0.19, and reported EPS from continuing operations rose to $0.33 from $0.09.36

The company beat expectations on both lines. Wall Street's average forecast was $2.25 billion in revenue and $0.23 in adjusted EPS.7 Two months later, the shares trade below $30. Most analyst price targets sit well above that.1214 So the earnings beat has made the investment case easier to argue, but the market has not yet paid for it.

How big was the beat

Not every outlet used the same consensus number, so the size of the miss in analysts' models depends on whose figure you take. Several outlets put the consensus at $0.23.210 Investing.com called it a $0.13 beat against a $0.22 estimate.4 TheWrap cited a $0.21 figure from analysts surveyed by Yahoo Finance, even though the same article also gave a $0.23 average.7 Under any of these numbers, News Corp beat by more than 50%. That is unusual for a mature media company.

The fourth quarter also continues a pattern. News Corp beat EPS estimates in each of the three earlier quarters of fiscal 2026. It posted $0.21 against $0.19 in the third quarter and $0.40 against $0.36 in the second.10 Its first-quarter result of $0.22 beat a $0.19 estimate, and the year before that it also beat consistently.9 The repeated beats suggest analysts keep underestimating how much of each new revenue dollar turns into profit. The fourth quarter showed that gap most clearly.

Where the profit came from

The profit gain was much larger than the revenue gain, and that is the main point of the quarter. Total Segment EBITDA rose 31% to $423 million from $322 million, while revenue grew 11%.3 Segment margin widened by about 280 basis points to roughly 18.1%.5 Chief Executive Robert Thomson said the result was the company's highest profitability on record. He credited Digital Real Estate Services, Dow Jones and Book Publishing, which the company calls its core growth engines.3

Digital real estate did the most. Revenue in that segment rose 19% and segment EBITDA rose 46%, with both REA Group in Australia and Move in the U.S. contributing more.3 Dow Jones grew revenue 7% to $644 million and segment EBITDA 20% to $181 million. That came from content licensing, digital subscriptions, an 11% rise in Risk & Compliance revenue and 10% growth in digital advertising.7 Digital sources made up 84% of Dow Jones revenue in the quarter.6 HarperCollins grew book revenue 15% to $566 million on strength in general, U.K. and children's titles.7

The legacy business went the other way. News Media revenue rose 5% only because of currency moves and was flat on an adjusted basis. Its segment EBITDA fell 14% because of costs tied to the newly launched California Post and World Cup spending at News Broadcasting.6

Currency and non-GAAP adjustments

The headline numbers need some adjusting. Currency added $71 million, about 4 percentage points, to fourth-quarter revenue. After also stripping out acquisitions and divestitures, adjusted revenue grew about 7%, not 11%.36 For the full year, revenue rose 7% to $9.03 billion, but adjusted revenue grew only 4%. Currency added $189 million.3

The profit numbers hold up better. Adjusted segment EBITDA at Dow Jones still rose 20%, and adjusted digital real estate EBITDA rose 33%.36 In other words, currency helped the top line but did not create the margin gains. That matters for whether the profit growth can last.

One more figure can mislead. A summary on one data site says full-year earnings fell 51% to $573 million.2 That drop comes from the prior year, when News Corp booked about $692 million in net income from discontinued operations. On a continuing basis, fiscal 2026 net income rose 15% to $743 million.3 Diluted EPS from continuing operations rose to $1.03 from $0.84, and adjusted EPS rose to $1.18 from $0.89.3 The underlying business grew. The comparison simply loses a one-time gain from the year before.

Cash flow and buybacks

With the restructuring largely done, News Corp is now pitching cash returns to shareholders. Operating cash flow rose 26% to $1.24 billion for the year, and free cash flow rose 42% to $811 million.3 The company spent $643 million on buybacks, more than four times the $150 million it spent in fiscal 2025.5

On the earnings call, Chief Financial Officer Lavanya Chandrashekar said 61% of fiscal 2026 revenue was digital. She noted three straight years of mid-teens profit growth on a continuing basis and said the company still sees "substantial runway" to improve margins.8 Thomson said this was the 12th straight quarter of year-over-year revenue growth and the 13th straight quarter of Total Segment EBITDA growth.8 Coverage before the report and after the call highlighted AI content-licensing deals as a new source of revenue that investors were watching.45

The stock didn't follow

Early trading after the report was mixed, and outlets described it differently. TheWrap reported the shares up about 1.3% after hours.7 An Investing.com headline on the call transcript said the shares slipped after hours.4 Both could be right at different moments of a choppy session. Taken together, they suggest a record quarter got a mild reaction.

The weeks since then have been quieter still. Recent quotes put NWSA at about $28 to $29.1213 That is below its 52-week high of $31.66.17 Simply Wall St puts the market value near $15.4 billion and the trailing P/E at about 27.8.1 Investing.com's comparison shows NWSA at about 28 times earnings, against about 20 times for a peer group that includes S&P Global, Thomson Reuters and Fox. Recent coverage has also discussed whether the stock already trades above some fair-value estimates.13

Analysts nudged targets up, but not by much

Analysts reacted with small target increases. Morgan Stanley raised its target to $35 from $34 the day after the report and kept an Overweight rating.417 JPMorgan raised its target to $38 from $36 on August 21, also at Overweight, citing Dow Jones growth.1317 Zacks Research went the other way and cut the stock from Strong-Buy to Hold on August 7.14

The consensus depends on which aggregator you use, because each one samples different analysts and time periods. MarketBeat shows an average of $38.50 across six analysts, a range of $35 to $43, and a "Moderate Buy" rating with five Buys and one Hold.14 Yahoo Finance shows an average of $36.16 with a high of $43.13 WallStreetZen averages three recent targets to $35.13, with Macquarie's $29.40 at the bottom.12 TipRanks puts the three-month average at $34.35.16

The aggregators agree on direction. None of the cited analysts rates the stock a Sell, and every consensus implies upside of about 20% to 36% from current prices.1214 Even so, MarketBeat's consensus target is lower than it was a year ago, $38.50 now against $38.62 then.14 Citi cut its target to $38 from $39 in May, and Guggenheim cut to $43 from $45 the previous November.14 The record quarter stopped that slide but did not push targets higher in any meaningful way.

What has changed for investors

Our reading is that the fourth quarter changed the main argument about News Corp. The question used to be whether a newspaper-heavy company could grow at all. Now the question is how much investors should pay for profit growth in the mid-teens that is already happening. The answer is mostly a matter of valuation. Margins are widening, cash flow is up, and buybacks have more than quadrupled. Against that, part of the revenue growth came from currency, the News Media segment is still a drag, and the stock trades at a premium to its peers.

The gap between analyst targets and the share price shows that analysts believe the growth story and the market is still waiting for more evidence. The next test is fiscal first-quarter results, due around November 5, 2026.13 If adjusted revenue growth holds near 7% and the AI-licensing revenue keeps building, the premium valuation becomes easier to justify. If growth falls back toward the 4% adjusted pace of the full year, the August beat may turn out to be the high point of the cycle.