Time for News Corporation to Strike a Balance between Transformation and Capital Management

No-moat-rated News Corporation's fiscal 2017 fourth-quarter EBITDA of USD 219 million was in line with our estimate, but the quality of the result was subpar. Even after adjusting for one less trading week in the quarter compared with a year ago, news and information services suffered an estimated 32% EBITDA fall to USD 103 million, while book EBITDA slumped an estimated 18% to USD 39 million. Add to that another USD 509 million in abnormal charges--primarily impairment and restructuring of U.K. newspaper assets--it is little wonder the stock is giving back some of the recent gains heading into the result.