News Corporation has beaten expectations with a solid earnings result in Rupert Murdoch's last quarter as chairman, as the company enters "advanced discussions" about using artificial intelligence to create content.
The New York-based media conglomerate posted $US2.5 billion ($A3.9 billion) in revenue for the three months ended September 30, a one per cent increase compared to the prior year.
The rise in revenue was accompanied by a four per cent increase in profitability and was primarily driven by growth in book publishing and at financial services publisher Dow Jones.
"We had a sterling start to the new fiscal year, with rising revenues and increased profitability despite difficult economic conditions in some of our markets," chief executive Robert Thomson said on Friday morning AEDT.
Professional information business revenues rose 14 per cent at Dow Jones while book publishing revenues grew eight per cent.
Digital real estate revenue was down four per cent as higher mortgage rates resulted in lower leads and transaction volumes drove a 16 per cent drop in revenue at Move.
News media revenue decreased $5 million, or one per cent, driven by a $10 million decline in ad revenue.
"The news media segment faced macroeconomic headwinds and volatility caused by algorithmic changes at the large platforms but these trends are more ephemeral than eternal," Mr Thomson said.
"We are in a truly different position to most media companies with a robust balance sheet and are poised for even greater growth and profitability in the coming years when the economic headwinds return to equilibrium."
News Corp continues to explore the potential applications of artificial intelligence, which the company already uses to generate thousands of "hyperlocal" articles a week on stories covering weather, fuel prices and traffic conditions.
"We are actively working to make the most of our premium content for AI and are engaged in advanced discussions that we expect to bring significant revenue to the company in return for the authorised use of our peerless content," Mr Thomson said.
"Our quest is to maximise value for all investors, so we are assiduously reviewing our structure."
First quarter total segment earnings before interest, taxation, depreciation and amortisation were $364 million, up from $350 million in the prior corresponding period, while net income in the quarter was $58 million, down from $66 million the year before.
E&P Capital analyst Entcho Raykovski expected the stock to outperform the market, given the EBITDA result beat consensus estimates by more than 10 per cent.
Mr Thomson insisted Mr Murdoch would be an important ongoing resource for News Corp even after he transitioned to the role of chairman emeritus at the company's AGM next week.
"I can personally assure you that there has been no change in his heightened levels of curiosity and energy since the announcement," he said.
