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Fox (FOXA) Q2 Earnings Top Estimates, Revenues Rise Y/Y

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Fox Corporation (FOXA - Free Report) reported second-quarter fiscal 2021 adjusted earnings of 16 cents against the Zacks Consensus Estimate of a loss of 11 cents per share. The figure increased 60% year over year.

Revenues were up 8.2% year over year to $4.08 billion. The figure surpassed the consensus mark by 2.9%.

Affiliate fees (37.1% of revenues) rose 5.7% to $1.5 billion. Advertising (55.8% of revenues) revenues increased 13.5% to $2.3 billion. Meanwhile, other revenues (7% of revenues) declined 13.6% from the year-ago quarter’s levels to $287 million.

Fox became a standalone, publicly-traded company on Mar 21, 2019, following the merger of Disney and Twenty-First Century Fox, Inc.

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.

Fox Corporation Price, Consensus and EPS Surprise

Fox Corporation Price, Consensus and EPS Surprise

Fox Corporation price-consensus-eps-surprise-chart | Fox Corporation Quote

Top-Line Details

Cable Network Programming (36.4% of revenues) revenues improved 1.3% year over year to $1.5 billion. Advertising revenues moved up 30.9% year over year, primarily driven by stronger linear and digital results at FOX News Media.

Meanwhile, revenues from Affiliate fees decreased 3% year over year as continued healthy underlying increases in affiliate revenues led by double-digit growth at FOX News Media were more than offset by the impact of an accrual for potential distribution credits as a result of cancelled college football games in the quarter due to COVID-19.

Other revenues declined 32% on a year-over-year basis, primarily due to lower sports sublicensing revenues as a result of COVID-19.

Television (62.5% of revenues) revenues increased 12.8% from the year-ago quarter’s figure to $2.5 billion. Advertising revenues increased 10% year over year primarily due to record political advertising revenues at the FOX Television Stations and the impact of the consolidation of Tubi.

Meanwhile, Affiliate fees and other revenues increased 23.2% and 9.6%, respectively. Affiliate revenues were driven by increases in fees from third-party FOX affiliates and higher average rates per subscriber at the company’s owned and operated television stations.

Operating Details

In second-quarter fiscal 2021, operating expenses increased 8.2% year over year to $3.3 billion. As a percentage of revenues, operating expenses expanded 10 basis points (bps) from the year-ago quarter to 81.9%.

Selling, general & administrative (SG&A) expenses increased 2.6% year over year to $442 million. As a percentage of revenues, SG&A expenses contracted 60 bps to 10.8%.

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 16.9% year over year to $305 million. EBITDA margin expanded 60 bps to 7.5%.

Cable Network Programming EBITDA improved 2.7% to $571 million. EBITDA margin grew 50 bps to 38.4%.

Television reported negative EBITDA, which declined 13.6% to $185 million.

Balance Sheet

As of Dec 31, 2020, Fox had $4.5 billion in cash and cash equivalents compared with $5.06 billion as of Sep 30, 2020.

Long-term debt as of Dec 31, 2020 was $7.94 billion, which remained flat sequentially.

Zacks Rank & Stocks to Consider

Fox currently carries a Zacks Rank #2 (Buy).

YETI Holdings, Inc. (YETI - Free Report) , JAKKS Pacific, Inc. (JAKK - Free Report) and Roku, Inc. (ROKU - Free Report) are some other top-ranked stocks in the broader Consumer & Discretionary sector. All three carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

YETI Holdings, JAKKS Pacific and Roku are scheduled to report earnings on Feb 11, Feb 17 and Feb 18, respectively.

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