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Madison Square Garden Sports (MSGS) Tops Q4 Earnings Estimates

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Madison Square Garden Sports Corp. (MSGS - Free Report) reported fourth-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and the bottom line improved significantly on a year-over-year basis. Moreover, total revenues topped the Zacks Consensus Estimate for the fourth straight quarter, while bottom line beat the estimate for the second consecutive quarter.

Andrew Lustgarten, CEO and president of Madison Square Garden Sports, has stated “Despite a challenging year, we had a tremendous response from Knicks and Rangers’ fans last season, including sell-out games and robust local ratings. For 2021-22, we look forward to building on this enthusiasm as we prepare for capacity crowds and full 82-game seasons.”

Earnings & Revenue Discussion

Madison Square Garden Sports reported earnings of $2.03 per share, which compared favorably with the Zacks Consensus Estimate of a loss of 63 cents. In the year-ago period, it reported a loss of $3.27 per share.

During fourth-quarter fiscal 2021, the company reported total revenues of $146.9 million, which surpassed the consensus mark of $129 million by 13.9%. In the prior-year quarter, the company reported revenues of ($7) million. The improvement can be primarily attributed to higher league distributions, local media rights fees from MSG Networks, sponsorship and signage revenues, playoff-related revenues and regular season ticket-related revenues.

Operating Highlights

Operating loss for the quarter improved 53.7% to $20.8 million from operating loss of $44.9 million reported during the prior-year period. This indicates an overall increase in revenues, partially offset by higher direct operating expenses and, to a lesser extent, a spike in selling, general and administrative expenses.

Meanwhile, the company’s adjusted operating loss improved 83% to $5.8 million from adjusted operating loss of $33.6 million reported in the year-ago quarter.

Balance Sheet

As of Jun 30, 2021, the company had $309.9 million of liquidity. As of Jun 2021-end cash and cash equivalents totaled $64.9 million compared with $77.9 million as on Jun 30, 2020.

For the quarter ended June 2021, the company had $55 million in borrowing capacity under the Knicks senior secured revolving credit facility, $115 million in borrowing capacity under the Rangers senior secured revolving credit facility and $75 million available under the Knicks Holdings unsecured revolving credit facility.

As of Jun 30, 2021, the company had long-term debt of $355 million, up from $350 million reported during the year-ago quarter.

2021 Highlights

For the year, total revenues amounted to $415.7 million, down 30.1% from 2020. Loss per share came in at 58 cents compared with a loss of $7.62 per share reported in the previous year.

Adjusted operating loss for the whole year summed up to $12.5 million, improving 54.5% from the loss of $27.5 million in 2020.

Zacks Rank & Key Picks

Madison Square Garden Sports has a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Leisure and Recreation Services industry include Bluegreen Vacations Holding Corporation , SeaWorld Entertainment, Inc. and RCI Hospitality Holdings, Inc. (RICK - Free Report) . Bluegreen Vacations and SeaWorld Entertainment’s sport a Zacks Rank #1 (Strong Buy), while RCI Hospitality has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bluegreen Vacations and SeaWorld Entertainment’s earnings for 2021 are expected to surge 172% and 176.4%.

RCI Hospitality’ earnings for fiscal 2021 are expected to rise 523.5%.


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