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21st Century Fox (FOXA) Beats on Q1 Earnings & Revenues
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Twenty-First Century Fox, Inc. (FOXA - Free Report) reported better-than-expected earnings for the second straight quarter. The company’s first-quarter fiscal 2017 earnings came in at 51 cents which surpassed the Zacks Consensus Estimate of 44 cents and increased 34.2% year over year.
Including one-time items, earnings came in at 44 cents a share compared with 34 cents in the year-ago quarter.
On the other hand, total revenue of $6,506 million improved 7.1% year over year and surpassed the Zacks Consensus Estimate of $6,431 million. This year-over-year rise was driven by increase in affiliate and advertising revenues at the Cable Network Programming. Additionally, increase in content revenues at the Filmed Entertainment segment provided a boost to the company’s overall revenue. However, the top-line growth was limited by $77 million negative impact of foreign currency exchange rate.
Segment wise, Cable Network Programming revenues rose 10% to $3,810 million on the back of robust affiliate and advertising revenues growth.
Filmed Entertainment revenues were up 6.8% to $1,907 million, whereas Television segment net revenues dipped 1% to $1,038 million, both on a year-over-year basis.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) jumped 16.7% year over year to $1,791 million in this fiscal quarter. Increase in OBIDA was due to higher contribution from the Filmed Entertainment segment and Cable Network Programming segments.
Detailed Discussion
OIBDA at Cable Network Programming climbed 6% to $1,384 million primarily owing to 10% increase in revenues. The increase was partially overshadowed by 12% increase in expenses. The rise in expenses was mostly due to increased sports programming costs in Latin America and India mainly owing to airing of the Rio Olympics, higher soccer rights costs at Major League Baseball at the regional sports networks (RSNs).
Foreign currency fluctuations hurt the segment’s OIBDA growth by 2%, primarily in Latin America.
OIBDA contribution from domestic channels rose 9% owing to sturdy OIBDA growth at FS1 and Fox News.
Further, at the domestic cable channels, affiliate revenues grew 8% due to sustained growth across FS1, FX Networks, Fox News Channel and RSNs. Domestic advertising revenues rose 6% on increase in pricing and rating both at Fox News.
Moreover, OIBDA contribution from International cable channels slumped 7% on increase in expenses at FNG International as well as STAR India owing to the airing of the Rio Olympics. Further, it was hampered by foreign currency headwinds. Affiliate revenues climbed 8% due to growth in local currency at STAR India as well as the FNG International entertainment channels.
Filmed Entertainment’s OIBDA increased more than double to $311 million in the quarter primarily owing to higher contributions from the company’s film studio due to a decrease in theatrical releasing costs. Additionally, increase in OIBDA was due to performance of Independence Day: Resurgence, the home entertainment performance of Deadpool as well as increase in contributions from the television production business.
Television segment’s OIBDA slipped 2.5% to $191 million owing to change in advertising spending toward the Rio Olympics.
Twenty-First Century Fox ended the quarter with cash and cash equivalents of $4,681 million. Total borrowings came in at $19,034 million and shareholders’ equity, excluding non-controlling interest of $1,248 million, came in at $13,807 million.
On Aug 3, 2016, the company announced a new share repurchase authorization of $3 billion. In the reported quarter, Twenty-First Century Fox bought back 16 million shares for $410 million.
Zacks Rank & Other Stocks to Consider
Twenty-First Century Fox carries a Zacks Rank #3 (Hold). Better-ranked stocks worth considering include Time Inc. (TIME - Free Report) , Sirius XM Holdings Inc. (SIRI - Free Report) and Nexstar Broadcasting Group, Inc. (NXST - Free Report) .
Time has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 10% and carries a Zacks Rank #2 (Buy).
Sirius XM Holdings has a long-term earnings growth rate of 24.5% and currently has a Zacks Rank #2.
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21st Century Fox (FOXA) Beats on Q1 Earnings & Revenues
Twenty-First Century Fox, Inc. (FOXA - Free Report) reported better-than-expected earnings for the second straight quarter. The company’s first-quarter fiscal 2017 earnings came in at 51 cents which surpassed the Zacks Consensus Estimate of 44 cents and increased 34.2% year over year.
Including one-time items, earnings came in at 44 cents a share compared with 34 cents in the year-ago quarter.
On the other hand, total revenue of $6,506 million improved 7.1% year over year and surpassed the Zacks Consensus Estimate of $6,431 million. This year-over-year rise was driven by increase in affiliate and advertising revenues at the Cable Network Programming. Additionally, increase in content revenues at the Filmed Entertainment segment provided a boost to the company’s overall revenue. However, the top-line growth was limited by $77 million negative impact of foreign currency exchange rate.
Segment wise, Cable Network Programming revenues rose 10% to $3,810 million on the back of robust affiliate and advertising revenues growth.
Filmed Entertainment revenues were up 6.8% to $1,907 million, whereas Television segment net revenues dipped 1% to $1,038 million, both on a year-over-year basis.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) jumped 16.7% year over year to $1,791 million in this fiscal quarter. Increase in OBIDA was due to higher contribution from the Filmed Entertainment segment and Cable Network Programming segments.
Detailed Discussion
OIBDA at Cable Network Programming climbed 6% to $1,384 million primarily owing to 10% increase in revenues. The increase was partially overshadowed by 12% increase in expenses. The rise in expenses was mostly due to increased sports programming costs in Latin America and India mainly owing to airing of the Rio Olympics, higher soccer rights costs at Major League Baseball at the regional sports networks (RSNs).
Foreign currency fluctuations hurt the segment’s OIBDA growth by 2%, primarily in Latin America.
OIBDA contribution from domestic channels rose 9% owing to sturdy OIBDA growth at FS1 and Fox News.
Further, at the domestic cable channels, affiliate revenues grew 8% due to sustained growth across FS1, FX Networks, Fox News Channel and RSNs. Domestic advertising revenues rose 6% on increase in pricing and rating both at Fox News.
Moreover, OIBDA contribution from International cable channels slumped 7% on increase in expenses at FNG International as well as STAR India owing to the airing of the Rio Olympics. Further, it was hampered by foreign currency headwinds. Affiliate revenues climbed 8% due to growth in local currency at STAR India as well as the FNG International entertainment channels.
Filmed Entertainment’s OIBDA increased more than double to $311 million in the quarter primarily owing to higher contributions from the company’s film studio due to a decrease in theatrical releasing costs. Additionally, increase in OIBDA was due to performance of Independence Day: Resurgence, the home entertainment performance of Deadpool as well as increase in contributions from the television production business.
Television segment’s OIBDA slipped 2.5% to $191 million owing to change in advertising spending toward the Rio Olympics.
Other Financial Details
TWENTY-FST CF-A Price, Consensus and EPS Surprise
TWENTY-FST CF-A Price, Consensus and EPS Surprise | TWENTY-FST CF-A Quote
Twenty-First Century Fox ended the quarter with cash and cash equivalents of $4,681 million. Total borrowings came in at $19,034 million and shareholders’ equity, excluding non-controlling interest of $1,248 million, came in at $13,807 million.
On Aug 3, 2016, the company announced a new share repurchase authorization of $3 billion. In the reported quarter, Twenty-First Century Fox bought back 16 million shares for $410 million.
Zacks Rank & Other Stocks to Consider
Twenty-First Century Fox carries a Zacks Rank #3 (Hold). Better-ranked stocks worth considering include Time Inc. (TIME - Free Report) , Sirius XM Holdings Inc. (SIRI - Free Report) and Nexstar Broadcasting Group, Inc. (NXST - Free Report) .
Nexstar Broadcasting Group has a long-term earnings growth rate of 6.5% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Time has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 10% and carries a Zacks Rank #2 (Buy).
Sirius XM Holdings has a long-term earnings growth rate of 24.5% and currently has a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>