Sphere Entertainment (NYSE:SPHR) Issues Earnings Results, Misses Estimates By $3.18 EPS

Key Points

• Sphere Entertainment reported a quarterly loss of $4.84 per share, missing analyst expectations by $3.18. Revenue increased 4.5% year over year to $274.26 million, topping estimates of $269.71 million.
• The Sphere venue showed stronger performance: revenue rose 14% to $198.9 million, and adjusted operating income grew to $32.4 million from $17.1 million. The company cited increased performances and higher revenue per show.
• MSG Networks weakened, with revenue falling to $75.4 million from $88.4 million and adjusted operating income dropping to $6.8 million, largely due to a 15.5% decline in subscribers.

Sphere Entertainment (NYSE:SPHR - Get Free Report) issued its earnings results on Thursday. The company reported ($4.84) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($1.66) by ($3.18), FiscalAI reports. Sphere Entertainment had a negative return on equity of 1.38% and a negative net margin of 6.19%. The firm had revenue of $274.26 million during the quarter, compared to analysts' expectations of $269.71 million. During the same quarter last year, the business earned ($2.80) EPS. The business's revenue was up 4.5% on a year-over-year basis.

Here are the key takeaways from Sphere Entertainment's conference call:

• Sphere revenue and adjusted operating income increased: Sphere revenue rose 14% year over year to $198.9 million, while adjusted operating income climbed to $32.4 million from $17.1 million, driven mainly by more Sphere Experience performances and higher per-show revenue.
• Management sees room for further growth from venue utilization, content, residencies and sponsorships. Exosphere advertising and sponsorship grew this quarter, and executives cited a strong pipeline and expected growth opportunities in 2027 and beyond.
• Content plans are expanding, but one production fell short: The Wizard of Oz has sold more than 4.3 million tickets for about $540 million, and Rocky Horror is expected to debut by the end of March. Management said From the Edge’s original concept did not work and is exploring ways to repurpose its footage.
• Venue expansion remains in progress: Abu Dhabi construction is on track for completion by the end of 2029, and the company expects to announce its next U.S. Sphere project in the coming months. National Harbor still requires another county vote and resolution of open items before financing discussions resume.
• MSG Networks continued to weaken: Revenue fell to $75.4 million from $88.4 million and adjusted operating income declined to $6.8 million from $19.3 million, primarily reflecting a 15.5% subscriber decrease. The company also recorded a non-cash goodwill impairment charge.

Sphere Entertainment Stock Performance

Shares of SPHR traded up $3.43 during trading hours on Thursday, hitting $112.28. The stock had a trading volume of 1,929,532 shares, compared to its average volume of 848,796. The firm has a 50-day moving average price of $124.98 and a 200 day moving average price of $130.30. Sphere Entertainment has a fifty-two week low of $71.27 and a fifty-two week high of $181.63. The company has a debt-to-equity ratio of 0.32, a quick ratio of 1.22 and a current ratio of 1.22.

Analyst Ratings Changes

SPHR has been the topic of a number of research reports. Citigroup reissued a "market outperform" rating on shares of Sphere Entertainment in a report on Tuesday, October 6th. Wells Fargo & Company set a $200.00 target price on Sphere Entertainment in a report on Tuesday, October 6th. Guggenheim dropped their target price on Sphere Entertainment from $208.00 to $180.00 and set a "buy" rating on the stock in a research report on Wednesday, October 14th. Weiss Ratings lowered Sphere Entertainment from a "hold (c)" rating to a "sell (d-)" rating in a research report on Friday, October 2nd. Finally, Seaport Research Partners set a $160.00 price target on shares of Sphere Entertainment in a report on Wednesday, October 7th. Eleven investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average price target of $160.93.

Sphere Entertainment News Roundup

Here are the key news stories impacting Sphere Entertainment this week:

• Positive Sentiment: Revenue was $274.26 million, up 4.5% year over year and ahead of analyst estimates of about $269.7 million. Zacks also reported a loss of $0.98 per share, narrower than its consensus estimate of a $1.79 loss. Zacks Q3 results
• Positive Sentiment: The Wizard of Oz at Sphere surpassed $500 million in ticket sales, with more than four million tickets sold since its August debut. The company also introduced expanded 4D effects, evidence of strong demand for its flagship attraction. Sphere Entertainment third-quarter results
• Negative Sentiment: Other earnings summaries show a much larger per-share loss: MarketBeat lists a loss of $4.84 versus analysts’ expected loss of $1.66, a substantial miss. This contrasts with the EPS comparison in Zacks’ report, so investors may want to check the company’s detailed results for the accounting measure behind each figure. RTT News report on Sphere’s Q3 loss

About Sphere Entertainment

Sphere Entertainment Co is an entertainment and media company focused on immersive live experiences and sports and entertainment programming. Its principal asset is Sphere, a next-generation venue in Las Vegas featuring a large exterior LED display, a high-resolution interior screen, advanced audio technology and immersive production capabilities.

Sphere presents concerts, residencies, films and other experiences, while its Sphere Studios business develops original content and technology for the venue and other immersive applications.

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