Back to top

Image: Shutterstock

Fox (FOXA) Earnings Top Estimates in Q4, Revenues Down Y/Y

Read MoreHide Full Article

Fox Corporation (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.

Top-Line Details

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).

YETI Holdings, Inc. (YETI - Free Report) , TEGNA Inc. (TGNA - Free Report) and WillScot Corporation (WSC - Free Report) are some other top-ranked stocks in the broader Consumer & Discretionary sector. While YETI sports a Zacks Rank #1 (Strong Buy), TEGNA and WillScot Corporation carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

YETI Holdings is set to release quarterly results on Aug 8. Both WillScot and TEGNA are scheduled to report earnings on Aug 10.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>