Fox Corporation
CEO : Mr. Lachlan Keith Murdoch
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 3.7% YoY | -100.0% | -486.7% | 2022-05-10 |
Steve Tomsic says,
Financial Performance
- Total company revenue increased by 7% YoY, delivering top-line growth across all operating segments.
- Total company affiliate revenues increased by 5%, and advertising revenues grew by 9%, driven by premium pricing and strong momentum at Tubi.
- Quarterly adjusted EBITDA was $811 million, down 10% YoY due to higher expenses, mainly driven by the increase in digital investments, programming rights amortization, and production costs.
- Net income attributable to stockholders was $283 million, or $0.50 per share, lower than the $567 million or $0.96 per share reported in the prior-year quarter.
Segment Results
- Cable Networks reported an 8% increase in revenues, underpinned by significant gains in cable advertising revenues, which grew by 20%. Cable affiliate revenues increased by 3%, and cable other revenues increased by 23%.
- Television segment delivered a 7% increase in revenue, led by an 8% increase in television affiliate revenues and 6% advertising revenue growth. Other revenues increased by 17%.
- Television EBITDA was lower by $100 million YoY, as its healthy revenue growth was more than offset by the planned digital investment at Tubi, higher sports programming amortization and production costs at FOX Sports, and an approximately $30 million write-down of certain scripted programming at FOX Entertainment.
Cash Flow and Share Repurchases
- Generated strong free cash flow of $1.54 billion in the quarter and returned over $1 billion of capital to shareholders, comprising approximately $275 million in the form of semi-annual dividend payments and a further $800 million in share buybacks.
- The company remains committed to utilizing its full buyback authorization of $4 billion and has cumulatively repurchased approximately $2.4 billion, representing over 11% of its total shares outstanding since the launch of the buyback program in November 2019.
Outlook
- The company expects a strong financial setup for fiscal 2023, driven by the financial tailwinds from Super Bowl 57, the early exit of Thursday Night Football, November’s mid-term elections, and the start of its next major distribution renewal cycle.
Lachlan Murdoch says,
Tom’s retirement and Tubi’s profitability
- The timing of Tom’s retirement is entirely up to him.
- Tubi has been at the forefront of upfront negotiations and we are constantly balancing the ad load in Tubi and the fill rate of those advertising slots.
- Tubi’s intelligent ad tech can adjust the ad load dynamically viewer-to-viewer, customer-to-customer.
- Tubi has been profitable in past quarters, but the right strategy and the way forward is to continue to invest in its growth.
- Tubi is positioned as a leader in advertising video-on-demand in the country.
Q & A sessions,
Advertising Perspective
- Seeing solid demand across businesses and pricing is high-single-digit, mid to high-single-digit above last year in entertainment.
- Pricing in Sports News is in mid-double digits, driven by demand across live sports and live news.
- Must-have sports tent poles are driving interest from clients, and it is advised to get in early for key events.
- Mid-term election cycle is expected to be a record cycle for advertising.
Television Distribution and Retransmission Revenue Perspective
- FOX News is effectively competing with free-to-air broadcasters in terms of audiences.
- FOX News and the station group’s retransmission and distribution revenue point of view have never been stronger.
- Expected to see continued advertising strength with the inclusion of Tubi, which has 50% growth in DVT time and engagement.
Entertainment Network Programming Costs Control
- Ability to transform the business to tightly control programming costs, and acquisitions such as Bento Box, TMZ, and MarVista will help.
- Joint venture with Gordon Ramsay Productions is exciting, and partnership expectations are high.
Digital Properties Investment
- Current level of investment in digital properties is appropriate, and the expected level is between $200 million and $300 million to grow those businesses.
- Tubi is expected to be the future of how people watch television in the country.
Sports Wagering Strategy and Business
- In arbitration, and expected to resolve in the summer.
- FOX Bet businesses continue to do incredibly well in the traditionally quiet period for sports wagering.
Sports Rights and Linear Platforms
- Key rights deserve to stay on broadcast and cable networks exclusively.
- Keeping high-quality exclusive content within platforms is how the company will deliver industry-leading distribution revenue gains.
No bad stock 