Fox Corporation ( FOXA Quick Quote FOXA - Free Report) reported fourth-quarter fiscal 2020 adjusted earnings of 62 cents per share that beat the Zacks Consensus Estimate by 1.6% and remained flat year over year. Revenues were down 3.8% year over year to $2.41 billion. The figure surpassed the consensus mark by 0.4%. Affiliate fees (62.8% of revenues) rose 7.7% to $1.51 billion. Other revenues (7.7% of revenues) inched up 1.1% from the year-ago quarter’s levels to $187 million. Meanwhile, Advertising (29.4% of revenues) revenues declined 22.4% to $712 million. Fox became a standalone, publicly-traded company on Mar 21, 2019, following the merger of Disney and Twenty-First Century Fox, Inc. Fox Corporation Price, Consensus and EPS Surprise
The standalone Fox’s portfolio comprises Twenty-First Century Fox’s news, sports and broadcast businesses. These include FOX News, FOX Business, FOX Broadcasting Company (the FOX Network), FOX Sports, FOX Television Stations Group, sports cable networks like FS1, FS2, FOX Deportes and Big Ten Network as well as certain other assets.
Cable Network Programming (52.6% of revenues) revenues declined 2.2% year over year to $1.27 billion. While revenues from Affiliate fees increased 0.9% year over year, advertising revenues declined 7.6% primarily due to the postponement of live events at FS1 as a result of COVID-19. This was partially offset by higher advertising revenues at FOX News Media.
Affiliate revenues benefited from contractual price increases, offset by net subscriber declines. Other revenues declined 30.6% on a year-over-year basis, primarily due to lower revenues at FOX Sports as a result of COVID-19. Television (46% of revenues) revenues declined 5.9% from the year-ago quarter’s figure to $1.11 billion. Advertising revenues declined 29.3% year over year due to weaker local advertising market at the FOX Television Stations, the postponement of live events at FOX Sports and lower ratings stemming from fewer hours of scripted programming at FOX Entertainment as a result of COVID-19. Meanwhile, Affiliate fees and other revenues increased 22.3% and 13.3%, respectively. Affiliate revenues were driven by increases in fees from third-party FOX affiliates and higher average rates per subscriber, partially offset by net subscriber declines at the company’s owned and operated television stations. Operating Details
In fourth-quarter fiscal 2020, operating expenses fell 12.6% year over year to $1.18 billion. As a percentage of revenues, operating expenses contracted 490 basis points (bps) to 49.1%.
Selling, general & administrative (SG&A) expenses increased 8.6% on a year-over-year basis to $494 million. As a percentage of revenues, SG&A expenses expanded 230 bps to 20.4%. The year-over-year increase in SG&A expenses was primarily due to higher costs related to FOX operating as a standalone public company. Segment EBITDA increased 4.7% year over year to $742 million. EBITDA margin expanded 250 bps on a year-over-year basis to 30.7%. Cable Network Programming EBITDA improved 12% to $674 million. EBITDA margin grew 670 bps to 53%. However, Television EBITDA declined 21% to $169 million. EBITDA margin contracted 290 bps to 15.2%. Balance Sheet
As of Jun 30, 2020, Fox had $4.64 billion in cash and cash equivalents compared with $3.19 billion as of Mar 31, 2020.
Long-term debt as of Jun 30, 2020 was $7.94 billion compared with $6.75 billion as of Mar 31, 2020. Zacks Rank & Stocks to Consider
Fox currently carries a Zacks Rank #5 (Strong Sell).
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