A month has gone by since the last earnings report for Fox (FOXA Quick QuoteFOXA - Free Report) . Shares have added about 8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fox due for a pullback? 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 Q1 Earnings Beat Estimates, Revenues Increase Y/Y

Fox Corporation reported first-quarter fiscal 2023 adjusted earnings of $1.21 per share, which beat the Zacks Consensus Estimate by 5.22%. The figure increased 9% year over year.

Revenues were up 4.8% year over year to $3.19 billion, which matched the consensus mark.

Affiliate fees (53.6% of revenues) rose 2.6% to $1.71 billion led by 6% growth at the Television segment. Meanwhile, advertising (38.2% of revenues) increased 8% to $1.22 billion, primarily due to higher political advertising revenues at the FOX Television Stations, continued strength in pricing across the company’s news and sports brands, and continued growth at TUBI.

Other revenues (8.2% of revenues) increased 5.2% from the year-ago quarter’s levels to $261 million, primarily due to higher FOX Nation subscription revenues.

Top-Line Details

Cable Network Programming (44.8% of revenues) revenues inched up 1.1% year over year to $1.43 billion. Advertising revenues increased 1.6%, primarily due to FOX News Media, where continued strength in linear pricing was partially offset by lower ratings and lower digital advertising revenues. In addition, advertising revenues associated with the national sports networks were lower in the quarter due to the absence of prior-year international soccer matches.

Revenues from Affiliate fees increased 0.3% year over year, primarily due to contractual price increases, partially offset by the impact of net subscriber declines. Other revenues increased 8.9% on a year-over-year basis, primarily due to higher FOX Nation subscription revenues.

Television (53.7% of revenues) revenues increased 8.4% from the year-ago quarter’s figure to $1.71 billion. Advertising revenues increased 10.5% year over year, primarily due to higher political advertising revenues at the FOX Television Stations, continued growth at TUBI and continued strength in pricing, partially offset by lower ratings, at the FOX Network. The FOX Network also benefitted from additional MLB broadcasts in the reported quarter.

Affiliate fees increased 6% year over year, driven by increases in fees from third-party FOX affiliates and higher average rates, partially offset by the impact of net subscriber declines, at the company’s owned and operated television stations.

Other revenues increased 5% year over year, primarily due to the impact of the consolidation of TMZ and entertainment production companies at FOX Entertainment.

Operating Details

In first-quarter fiscal 2023, operating expenses increased 5.4% year over year to $1.65 billion. As a percentage of revenues, operating expenses expanded 30 basis points (bps) to 51.9%.
Selling, general & administrative (SG&A) expenses increased 8% year over year to $448 million. As a percentage of revenues, SG&A expenses expanded 40 bps to 14%.

Total adjusted EBITDA increased 2.6% year over year to $1.09 billion. EBITDA margin contracted 70 bps to 34.2%.

Cable Network Programming EBITDA decreased 4.1% year over year to $742 million. EBITDA margin contracted 280 bps to 51.9%.

Television EBITDA jumped 13.9% to $409 million. EBITDA margin expanded 120 bps to 23.9%.

Balance Sheet

As of Sep 30, 2022, Fox had $4.95 billion in cash and cash equivalents compared with $5.2 billion as of Jun 30, 2022.

Long-term debt, as of Sep 30, 2022, was $7.20 billion, which remained flat sequentially.

The company has authorized a $4 billion stock repurchase program. To date, the company has repurchased $2 billion of its Class A common stock and $860 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 -10.2% due to these changes.

VGM Scores

Currently, Fox has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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. It's no surprise Fox has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Fox belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Grupo Televisa (TV Quick QuoteTV - Free Report) , has gained 3.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Grupo Televisa reported revenues of $951.77 million in the last reported quarter, representing a year-over-year change of -27.1%. EPS of $0.03 for the same period compares with $0.07 a year ago.