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Madison Square (MSG) Reports Narrower-Than-Expected Q1 Loss

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The Madison Square Garden Company (MSG - Free Report) reported better-than-expected results in the first quarter of fiscal 2019. The company reported narrower-than-expected loss and its revenues surpassed the Zacks Consensus Estimate.

Madison Square incurred adjusted loss per share of $1.36, wider than the consensus estimate of loss of $1.87. In the prior-year quarter, the company incurred loss of 47 cents per share.

Net revenues were $218.1 million, which surpassed the consensus mark of $208 million by 4.8% but fell 11% year over year.

The Madison Square Garden Company Price, Consensus and EPS Surprise

 

Segmental Performance

Madison Square operates under two segments — MSG Sports and MSG Entertainment.

In the quarter under review, revenues from Madison Square’s Entertainment segment totaled $163 million, down 1% year over year. The downside was due to lower overall event-related revenues at the company's venues and lesser suite rental fee revenues. The fall in revenues was partially offset by increased revenues from TAO Group, higher sponsorship, and signage and inclusion of Obscura Digital results.

The segment’s operating income came in at $1.7 million, down from $8.4 million in the prior-year quarter. The decrease in operating income was due to higher selling, general and administrative expenses, and increased direct operating expenses coupled with lower revenues.

Revenues from the Sports segment declined 32% to $55.4 million. The downside can be attributed to the timing of local media rights revenues from MSG Networks Inc. as well as lower suite rental fee revenues. However, the decline was partially offset by an increase in revenues from league distributions.

The segment recorded operating loss of $4.1 million, up by $24.5 million from the year-ago quarter. The wider loss reflects greater selling, general and administrative expenses, and lower revenues, partially offset by a decrease in direct operating expenses.

Operating Income

In the reported quarter, Madison Square incurred adjusted loss of $9.9 million, narrower than the adjusted loss of $30.1 million in the year-ago quarter.

Balance Sheet

Cash and cash equivalents totaled $1.06 billion as of Sep 30, 2018, compared with $1.22 billion as of Jun 30, 2018. The company ended the reported quarter with long-term debt of $100.9 million compared with $101.3 million at the end of fiscal 2018.

Zacks Rank & Peer Releases

Madison Square currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carnival Corporation (CCL - Free Report) reported better-than-expected third-quarter fiscal 2018 results. Earnings were $2.36 per share, which outpaced the Zacks Consensus Estimate of $2.31 and improved 3.1% year over year.

Royal Caribbean Cruises Ltd. (RCL - Free Report) reported mixed results for the third quarter of 2018, wherein earnings surpassed analysts’ expectations while revenues lagged the same. Adjusted earnings of $3.98 per share surpassed the Zacks Consensus Estimate of $3.96 by 0.5% and increased 13.5% year over year backed by higher revenues.

Upcoming Peer Release

SeaWorld Entertainment (SEAS - Free Report) is slated to report quarterly results on Nov 5, before the market opens. The company currently flaunts a Zacks Rank #1.

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