FOX (NASDAQ:FOX) Issues Earnings Results, Beats Expectations By $0.33 EPS

Key Points

• FOX beat quarterly expectations, reporting adjusted EPS of $1.32 versus the $0.99 consensus and revenue of $3.99 billion above estimates. The company also posted a strong 11.41% net margin and 18.14% return on equity.
• Operating performance was strong across key businesses, with adjusted EBITDA of $954 million, free cash flow of $1.77 billion, and continued share buybacks. Management highlighted growth in Fox One and Tubi, along with robust news and sports audience trends.
• Some headwinds remain as total advertising fell 24% year over year due to the absence of Super Bowl comparisons, while TV distribution was roughly flat. Still, analysts and the market reacted positively, with FOX shares trading higher after the report.

FOX (NASDAQ:FOX - Get Free Report) announced its quarterly earnings results on Monday. The company reported $1.32 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.99 by $0.33, FiscalAI reports. FOX had a net margin of 11.41% and a return on equity of 18.14%. The firm had revenue of $3.99 billion for the quarter, compared to the consensus estimate of $3.78 billion.

Here are the key takeaways from FOX's conference call:

• Record quarter: Fox reported $4.0B revenue and adjusted EBITDA of $954M (up 11%), adjusted EPS of $1.32 (up 20%), and generated $1.77B of free cash flow while continuing sizable share buybacks.
• Digital momentum: Fox One subscriber additions and unexpectedly low churn boosted distribution revenue and helped stabilize overall subscriber declines, while Tubi grew revenue 23%, view time 19% and was near break-even in the quarter.
• Audience and advertising strength from news and sports: Fox News hit its highest Q3 ad revenue ever and is the top cable network (CPMs up >45%), and sports franchises (World Baseball Classic, MLB, IndyCar, NFL) posted strong ratings with Fox adding two national NFL games and preparing for an EBITDA-accretive FIFA World Cup window.
• Headline advertising decline and segment pressures: Total advertising was down 24% year-over-year driven by the lapping of Super Bowl LIX, TV distribution was roughly flat (down 1%), and cable expenses rose due to higher sports rights amortization—factors that temper near-term comparables.

FOX Trading Up 2.3%

Shares of FOX traded up $1.30 during trading on Monday, reaching $57.90. 298,328 shares of the company traded hands, compared to its average volume of 1,600,120. FOX has a twelve month low of $48.38 and a twelve month high of $68.18. The stock has a market cap of $24.63 billion, a PE ratio of 13.88, a price-to-earnings-growth ratio of 6.93 and a beta of 0.54. The stock has a 50-day simple moving average of $54.31 and a 200-day simple moving average of $58.24. The company has a quick ratio of 2.44, a current ratio of 2.78 and a debt-to-equity ratio of 0.60.

Insider Transactions at FOX

In other FOX news, COO John Nallen sold 216,806 shares of FOX stock in a transaction dated Thursday, March 12th. The shares were sold at an average price of $57.68, for a total transaction of $12,505,370.08. Following the completion of the sale, the chief operating officer directly owned 362,206 shares in the company, valued at $20,892,042.08. This trade represents a 37.44% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Lachlan K. Murdoch sold 637,752 shares of FOX stock in a transaction dated Friday, March 13th. The shares were sold at an average price of $58.20, for a total transaction of $37,117,166.40. Following the sale, the chief executive officer owned 152 shares of the company's stock, valued at approximately $8,846.40. This represents a 99.98% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 1,586,871 shares of company stock valued at $91,893,926. Company insiders own 23.06% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in the business. Marshall Wace LLP grew its holdings in shares of FOX by 792.4% in the third quarter. Marshall Wace LLP now owns 3,184,642 shares of the company's stock valued at $182,448,000 after purchasing an additional 2,827,768 shares in the last quarter. Bank of New York Mellon Corp grew its holdings in shares of FOX by 1.5% in the fourth quarter. Bank of New York Mellon Corp now owns 666,815 shares of the company's stock valued at $43,296,000 after purchasing an additional 10,165 shares in the last quarter. Pinebridge Investments LLC acquired a new position in shares of FOX in the fourth quarter valued at approximately $13,758,000. California State Teachers Retirement System grew its holdings in shares of FOX by 4.3% in the fourth quarter. California State Teachers Retirement System now owns 182,689 shares of the company's stock valued at $11,862,000 after purchasing an additional 7,515 shares in the last quarter. Finally, Ameriprise Financial Inc. grew its holdings in shares of FOX by 27.9% in the third quarter. Ameriprise Financial Inc. now owns 114,626 shares of the company's stock valued at $6,567,000 after purchasing an additional 24,982 shares in the last quarter. Institutional investors and hedge funds own 26.41% of the company's stock.

Key FOX News

Here are the key news stories impacting FOX this week:

• Positive Sentiment: Fox reported adjusted earnings of $1.32 per share, ahead of estimates, with revenue of $3.99 billion also topping forecasts. Investors are likely encouraged by the company’s ability to outperform despite a tough comparison. Article Title
• Positive Sentiment: The company said advertising strength in sports, news and Tubi helped offset the absence of Super Bowl broadcasting, suggesting core businesses are still performing well. Article Title
• Positive Sentiment: Fox also said distribution revenue rose 3% and cable network programming grew 5%, which could support confidence in the company’s underlying cash flow. Article Title
• Positive Sentiment: Management highlighted new NFL rights and gearing up for the World Cup, both of which could boost future viewership and advertising revenue. Article Title
• Neutral Sentiment: Fox’s revenue fell from a year ago because it did not broadcast the Super Bowl this quarter, making the decline largely a comparison issue rather than a sign of weakening demand. Article Title

Analysts Set New Price Targets

A number of analysts recently issued reports on FOX shares. Wells Fargo & Company downgraded shares of FOX from a "strong-buy" rating to a "hold" rating in a report on Thursday, February 5th. Bank of America reiterated an "underperform" rating and issued a $45.00 target price (down from $80.00) on shares of FOX in a research report on Wednesday, February 25th. Finally, Zacks Research cut shares of FOX from a "strong-buy" rating to a "hold" rating in a research report on Thursday, February 5th. Four equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Hold" and an average price target of $75.00.

FOX Company Profile

Fox Corporation NASDAQ: FOX is a U.S.-based media company that operates television broadcast, news and sports businesses. The company traces its contemporary structure to the 2019 reorganization that followed the sale of certain entertainment assets to The Walt Disney Company; Fox Corporation retained a portfolio centered on the Fox Broadcasting Company, Fox Television Stations, Fox News Media and Fox Sports. Over time the company has expanded its digital footprint through acquisitions and direct-to-consumer services, building a mix of linear and streaming distribution.

FOX's core activities include the creation, aggregation and distribution of television programming and live sports, the operation of national cable news and business networks, and the ownership and operation of local broadcast stations.

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