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Fox (FOXA) Down 9.6% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Fox (FOXA - Free Report) . Shares have lost about 9.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fox due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fox Q2 Earnings Top Estimates, Revenues Increase Y/Y
Fox reported second-quarter fiscal 2022 adjusted earnings of 13 cents per share, which beat the Zacks Consensus Estimate of one cent but decreased 18.8% year over year.
Revenues were up 8.7% year over year to $4.44 billion. The figure surpassed the consensus mark by 5.5%.
Affiliate fees (38% of revenues) rose 11.2% year over year to $1.69 billion. Advertising (54.2% of revenues) revenues increased 5.5% year over year to $2.41 billion. Other revenues (7.8% of revenues) increased 20.2% year over year to $345 million.
Top-Line Details
Cable Network Programming (36.9% of revenues) revenues increased 10.1% year over year to $1.64 billion. Advertising revenues increased 2.9% year over year, driven by continued pricing strength at FOX News Media, as well as stronger pricing and additional MLB playoff games at the national sports networks.
Revenues from Affiliate fees increased 12% year over year, driven by contractual price increases, including the impact of distribution agreement renewals.
Other revenues increased 21.8% on a year-over-year basis, driven by higher sports subscription sublicensing revenues.
Television (62.1% of revenues) revenues climbed 7.9% from the year-ago quarter to $2.76 billion. Advertising revenues increased 6.1% year over year, primarily due to a recovering base market at the FOX Television Stations, continued growth at Tubi and strong pricing at FOX Entertainment.
Affiliate fees and other revenues increased 10% and 24.8%, respectively. Affiliate revenues were driven by increases in fees from third-party FOX affiliates and higher average rates at the company’s owned and operated television stations.
Increase in other revenues was primarily due to higher content revenues at FOX Entertainment, as well as the acquisitions of MarVista Entertainment and TMZ.
Operating Details
In second-quarter fiscal 2022, operating expenses increased 9.6% year over year to $3.67 billion. As a percentage of revenues, operating expenses expanded 70 basis points (bps) to 82.6%.
Selling, general & administrative (SG&A) expenses increased 5.9% year over year to $468 million. As a percentage of revenues, SG&A expenses decreased 30 bps to 10.5%.
Adjusted EBITDA increased 1.6% year over year to $310 million. EBITDA margin contracted 50 bps to 7%.
Cable Network Programming EBITDA increased 17% year over year at $668 million. EBITDA margin expanded 240 bps on a year-over-year basis to 40.8%.
Television EBITDA loss was $273 million compared with year-ago quarter’s loss of $185 million.
Balance Sheet
As of Dec 31, 2021, Fox had $4.26 billion in cash and cash equivalents compared with $5.41 billion as of Sep 30, 2021.
Long-term debt, as of Dec 31, 2021, was $7.20 billion, which remained flat sequentially.
Fox declared a dividend of 24 cents per Class A and Class B share, payable on Mar 30, 2022.
Fox has authorized a $4-billion stock repurchase program. To date, the company has repurchased $1.5 billion of its Class A common stock and $634 million of its Class B common stock.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -6.05% due to these changes.
VGM Scores
At this time, Fox has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fox has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Fox (FOXA) Down 9.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Fox (FOXA - Free Report) . Shares have lost about 9.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fox due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fox Q2 Earnings Top Estimates, Revenues Increase Y/Y
Fox reported second-quarter fiscal 2022 adjusted earnings of 13 cents per share, which beat the Zacks Consensus Estimate of one cent but decreased 18.8% year over year.
Revenues were up 8.7% year over year to $4.44 billion. The figure surpassed the consensus mark by 5.5%.
Affiliate fees (38% of revenues) rose 11.2% year over year to $1.69 billion. Advertising (54.2% of revenues) revenues increased 5.5% year over year to $2.41 billion. Other revenues (7.8% of revenues) increased 20.2% year over year to $345 million.
Top-Line Details
Cable Network Programming (36.9% of revenues) revenues increased 10.1% year over year to $1.64 billion. Advertising revenues increased 2.9% year over year, driven by continued pricing strength at FOX News Media, as well as stronger pricing and additional MLB playoff games at the national sports networks.
Revenues from Affiliate fees increased 12% year over year, driven by contractual price increases, including the impact of distribution agreement renewals.
Other revenues increased 21.8% on a year-over-year basis, driven by higher sports subscription sublicensing revenues.
Television (62.1% of revenues) revenues climbed 7.9% from the year-ago quarter to $2.76 billion. Advertising revenues increased 6.1% year over year, primarily due to a recovering base market at the FOX Television Stations, continued growth at Tubi and strong pricing at FOX Entertainment.
Affiliate fees and other revenues increased 10% and 24.8%, respectively. Affiliate revenues were driven by increases in fees from third-party FOX affiliates and higher average rates at the company’s owned and operated television stations.
Increase in other revenues was primarily due to higher content revenues at FOX Entertainment, as well as the acquisitions of MarVista Entertainment and TMZ.
Operating Details
In second-quarter fiscal 2022, operating expenses increased 9.6% year over year to $3.67 billion. As a percentage of revenues, operating expenses expanded 70 basis points (bps) to 82.6%.
Selling, general & administrative (SG&A) expenses increased 5.9% year over year to $468 million. As a percentage of revenues, SG&A expenses decreased 30 bps to 10.5%.
Adjusted EBITDA increased 1.6% year over year to $310 million. EBITDA margin contracted 50 bps to 7%.
Cable Network Programming EBITDA increased 17% year over year at $668 million. EBITDA margin expanded 240 bps on a year-over-year basis to 40.8%.
Television EBITDA loss was $273 million compared with year-ago quarter’s loss of $185 million.
Balance Sheet
As of Dec 31, 2021, Fox had $4.26 billion in cash and cash equivalents compared with $5.41 billion as of Sep 30, 2021.
Long-term debt, as of Dec 31, 2021, was $7.20 billion, which remained flat sequentially.
Fox declared a dividend of 24 cents per Class A and Class B share, payable on Mar 30, 2022.
Fox has authorized a $4-billion stock repurchase program. To date, the company has repurchased $1.5 billion of its Class A common stock and $634 million of its Class B common stock.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -6.05% due to these changes.
VGM Scores
At this time, Fox has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fox has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.