News falls after quarterly results show stronger adjusted earnings but negative free cash flow

What happened

News (NWSA) fell 13.4% on November 5, 2026, because fiscal Q1 results showed adjusted earnings up sharply while free cash flow turned negative. The stock opened 6.3% below the previous close and closed at $26.48 as volume ran 2.8 times its 20-day average. Seeking Alpha and Zacks Investment Research reported the results, which showed adjusted earnings growth driven by real estate, Dow Jones and publishing businesses.

How big was the move

The drop was large for the stock: the session move was 5.7 times a typical daily move for this stock and the share price fell 10.1% over the last five sessions. The S&P 500 fell 4.4% on the day and fell 4.7% over five sessions, while the Communication Services sector median fell 2.6% on the day, leaving the stock 10.8 percentage points worse than the sector median. Trading volume that was 2.8 times its 20-day average reinforced that market reaction, suggesting an investor response tied to the earnings release rather than broad market moves.

The technical picture

The stock closed 11.1% below its 20-day moving average and 10.7% below its 50-day moving average, while it was 1.8% below its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend. The Relative Strength Index (14 days) was 32, in a neutral range between 30 and 70. Over shorter horizons, the shares fell 7.4% over one month and fell 7.2% over three months; over one year the stock rose 2.6%, leaving it 6.0 percentage points behind the S&P 500. The shares were 16.4% below their 52-week high. Volatility was 37% annualized over 60 days, higher than 95% of its own readings over five years, indicating unusually large price swings for the company recently.

Fundamentals and valuation

For the four quarters through September 30, 2026, revenue was $9.16 billion, which grew 7.8% from a year earlier and improved on growth of 6.8% one quarter earlier. Diluted earnings per share were $1.12, which rose 38.7% from a year earlier, and gross margin was 56.9% compared with 55.2% a year earlier. Operating margin was 11.8%, down from 15.4% a year earlier, while free-cash-flow margin was 10.7% and return on invested capital was 5.7%. The balance sheet showed net debt of 0.7 times EBITDA and share count over one year decreased by 4.3%.

Valuation measures included 23.6 times trailing earnings and 20.0 times expected forward earnings, with a free-cash-flow yield of 6.0%. The price to trailing earnings is lower than 81% of its own readings over the past five years, where the five-year median was 33.1 times earnings. Those metrics suggest the market is assigning a relatively lower earnings multiple to the company despite recent profit growth, a gap that may reflect concerns about cash generation after the latest quarter.

Earnings and analyst expectations

The last report, on November 4, 2026, delivered earnings per share of $0.28 against $0.26 expected, 7.7% above estimates, and marked five consecutive quarters beating estimates. The average surprise over the last four reports was 31.7% above estimates, and the typical two-day reaction after recent reports was the stock rose 0.7%. The next report date is February 4, 2027. Analysts covering the stock total 28, with 79% rating the stock Buy or Strong Buy and a consensus rating of Buy. The consensus price target was $33.13, 25.1% above the closing price.

PromtFinance scores ranked within the sector showed a Revisions score of 90 (Exceptional) and Stability 86 (Strong), with Value 68 (Positive), Growth 66 (Positive), Quality 62 (Neutral) and Momentum 55 (Neutral). Those internal scores highlight strong analyst revision trends and balance-sheet stability, even as momentum and quality metrics sit nearer the middle of the sector peer group.

What to watch

• February 4, 2027: next scheduled earnings report
• November 4, 2026: last report EPS $0.28 vs $0.26 expected, 7.7% above estimates
• Consensus price target $33.13, 25.1% above the closing price
• Trading volume on November 5, 2026, was 2.8 times its 20-day average
• Operating margin for the four quarters through September 30, 2026, was 11.8% (a year earlier: 15.4%)