S&P revises News Corp. view to positive

S&P said it changed its outlook for News Corp. to positive from stable and affirmed the BB+ ratings on the issuer and its senior unsecured debt. The 3 recovery rating on the debt is unchanged.

“The positive outlook reflects News Corp.'s resilient operating performance despite a challenging macroeconomic environment over the last 12-18 months. The company's trailing-12-month S&P Global Ratings-adjusted leverage was 2.4x as of Dec. 31, 2023, as its stronger business segments more than offset weaker segments that are exposed to secular pressures in advertising and pay-TV services.

“Despite a weak advertising market and elevated interest rates, News Corp.'s adjusted leverage was about 2.4x during fiscal year 2023 (ended June 30, 2023) while it continued to generate free operating cash flow (FOCF) to debt of over 20%,” S&P said in a press release.

The agency said it expects News Corp. to maintain its adjusted leverage below 2.5x as operating performance improves.

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