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Why Is Twenty-First Century Fox (FOXA) Down 3.9% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Twenty-First Century Fox, Inc. (FOXA - Free Report) . Shares have lost about 3.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Twenty-First Century Fox Tops Q3 Earnings, Revenues Lag
Twenty-First Century Fox reported better-than-expected earnings for the fourth straight quarter. The company’s third-quarter fiscal 2017 earnings from continuing operations came in at $0.54, surpassing the Zacks Consensus Estimate of $0.47 and increased 14.9% year over year driven by robust performance of Cable Network Programming and Television.
Including one-time items, Twenty-First Century Fox’s earnings came in at $0.44 a share, flat year-over-year
Though total revenues of $7,564 million improved 4.6% year over year, it missed the Zacks Consensus Estimate of $7,681 million due to lower content revenues at the Filmed Entertainment division. The company’s top line has lagged the Zacks Consensus Estimate in the trailing eight out of nine quarters.
Segment wise, Cable Network Programming revenues gained 2.1% to $4,024 million on the back of robust affiliate revenues growth.
Filmed Entertainment revenues were down 2.8% to $2,256 million, while Television segment net revenues were up 30.1% to $1,690 million, both on a year-over-year basis.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) advanced 2.9% year over year to $1,938 million in this fiscal quarter. Increase in OBIDA was due to higher contribution from the Cable Network Programming and Television segments.
Detailed Discussion
OIBDA at Cable Network Programming climbed 5% to $1,446 million owing to 2.1% increase in revenues. The increase was partially overshadowed by higher entertainment programming and marketing costs at FX Networks and National Geographic Channels. Higher right costs at National Association for Stock Car Auto Racing (“NASCAR”) at FOX Sports 1 (“FS1”) and National Basketball Association (“NBA”) drove the expenses higher.
OIBDA contribution from domestic was flat year over year as higher ratings impact at Fox News and FS1 was offset by decline in revenues at the National Geographic Partners businesses.
At the domestic cable channels, affiliate revenues grew 8% driven by sustained growth across FS1, FX Networks, Fox News Channel and RSNs. Domestic advertising revenues were flat year-over-year.
OIBDA contribution from International cable channels jumped 44% due to decline in costs at STAR India coupled with robust performance of Fox Networks Group International. Affiliate revenues climbed 5% owing to growth in local currency. International advertising revenues slumped 18% primarily caused by fall in advertising revenues at STAR India. Demonetization in India also hampered the advertising market.
Filmed Entertainment’s OIBDA decreased 21% to $373 million in the quarter owing to decline in film studio contributions on account of tough year over year comparison. The prior-year period gained from the remarkable performance of Deadpool and The Martian.
Television segment’s OIBDA rose 52% to $190 million buoyed by 30% growth in revenues. The segment also benefited from increased sports advertising revenues, higher retransmission consent revenues and higher content revenues.
Other Financial Details
Twenty-First Century Fox, which shares space with The Walt Disney Company (DIS) ended the quarter with cash and cash equivalents of $5,572 million. Total borrowings came in at $19,789 million and shareholders’ equity, excluding non-controlling interest of $1,235 million, was $15,017 million.
Other Developments
Rupert Murdoch’s Twenty-First Century Fox has made a “Possible Offer” to purchase remaining 61% stake in Europe’s leading pay-TV broadcaster Sky plc. The company already owns 39.1% stake in Sky. The buyout will strengthen the company’s position in pay-TV network in Britain, Ireland, Austria, Germany and Italy. The deal has received go-ahead from European Commission.
As of 2016, Sky already has 21 million pay-TV subscribers and 30,000 employees. The deal will strengthen Sky’s position in entertainment and sport, strengthening its adjusted earnings and free cash flow.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Twenty-First Century Fox, Inc. Price and Consensus
At this time, Twenty-First Century Fox's stock has an average Growth Score of 'C' while it is lagging a bit on the momentum front with 'D'. 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Twenty-First Century Fox (FOXA) Down 3.9% Since the Last Earnings Report?
A month has gone by since the last earnings report for Twenty-First Century Fox, Inc. (FOXA - Free Report) . Shares have lost about 3.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Twenty-First Century Fox Tops Q3 Earnings, Revenues Lag
Twenty-First Century Fox reported better-than-expected earnings for the fourth straight quarter. The company’s third-quarter fiscal 2017 earnings from continuing operations came in at $0.54, surpassing the Zacks Consensus Estimate of $0.47 and increased 14.9% year over year driven by robust performance of Cable Network Programming and Television.
Including one-time items, Twenty-First Century Fox’s earnings came in at $0.44 a share, flat year-over-year
Though total revenues of $7,564 million improved 4.6% year over year, it missed the Zacks Consensus Estimate of $7,681 million due to lower content revenues at the Filmed Entertainment division. The company’s top line has lagged the Zacks Consensus Estimate in the trailing eight out of nine quarters.
Segment wise, Cable Network Programming revenues gained 2.1% to $4,024 million on the back of robust affiliate revenues growth.
Filmed Entertainment revenues were down 2.8% to $2,256 million, while Television segment net revenues were up 30.1% to $1,690 million, both on a year-over-year basis.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) advanced 2.9% year over year to $1,938 million in this fiscal quarter. Increase in OBIDA was due to higher contribution from the Cable Network Programming and Television segments.
Detailed Discussion
OIBDA at Cable Network Programming climbed 5% to $1,446 million owing to 2.1% increase in revenues. The increase was partially overshadowed by higher entertainment programming and marketing costs at FX Networks and National Geographic Channels. Higher right costs at National Association for Stock Car Auto Racing (“NASCAR”) at FOX Sports 1 (“FS1”) and National Basketball Association (“NBA”) drove the expenses higher.
OIBDA contribution from domestic was flat year over year as higher ratings impact at Fox News and FS1 was offset by decline in revenues at the National Geographic Partners businesses.
At the domestic cable channels, affiliate revenues grew 8% driven by sustained growth across FS1, FX Networks, Fox News Channel and RSNs. Domestic advertising revenues were flat year-over-year.
OIBDA contribution from International cable channels jumped 44% due to decline in costs at STAR India coupled with robust performance of Fox Networks Group International. Affiliate revenues climbed 5% owing to growth in local currency. International advertising revenues slumped 18% primarily caused by fall in advertising revenues at STAR India. Demonetization in India also hampered the advertising market.
Filmed Entertainment’s OIBDA decreased 21% to $373 million in the quarter owing to decline in film studio contributions on account of tough year over year comparison. The prior-year period gained from the remarkable performance of Deadpool and The Martian.
Television segment’s OIBDA rose 52% to $190 million buoyed by 30% growth in revenues. The segment also benefited from increased sports advertising revenues, higher retransmission consent revenues and higher content revenues.
Other Financial Details
Twenty-First Century Fox, which shares space with The Walt Disney Company (DIS) ended the quarter with cash and cash equivalents of $5,572 million. Total borrowings came in at $19,789 million and shareholders’ equity, excluding non-controlling interest of $1,235 million, was $15,017 million.
Other Developments
Rupert Murdoch’s Twenty-First Century Fox has made a “Possible Offer” to purchase remaining 61% stake in Europe’s leading pay-TV broadcaster Sky plc. The company already owns 39.1% stake in Sky. The buyout will strengthen the company’s position in pay-TV network in Britain, Ireland, Austria, Germany and Italy. The deal has received go-ahead from European Commission.
As of 2016, Sky already has 21 million pay-TV subscribers and 30,000 employees. The deal will strengthen Sky’s position in entertainment and sport, strengthening its adjusted earnings and free cash flow.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Twenty-First Century Fox, Inc. Price and Consensus
Twenty-First Century Fox, Inc. Price and Consensus | Twenty-First Century Fox, Inc. Quote
VGM Scores
At this time, Twenty-First Century Fox's stock has an average Growth Score of 'C' while it is lagging a bit on the momentum front with 'D'. 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.