Fox Tops Q2 Earnings Estimates as Cable Carries Broadcast TV Decline

Here’s what you’re (probably) inheriting, Disney

Last Updated: February 7, 2018 @ 2:21 PM

Fox just revealed its fiscal Q2 2018 financials, besting media analysts’ expectations for the recent three-month period. October-December 2017 provided 90 days-worth of two very different results from its television holdings, which can best be summed up this way: Cable good, Broadcast bad.

Wall Street had forecast Fox’s earnings per share at 38 cents on $7.94 billion in revenue, per a Yahoo Finance-compiled consensus. The company actually earned 42 cents per share on $8.04 billion in revenue. It’s nice to have a beat on both of those estimates, but Fox dropped 11 cents per share of earnings from the comparable quarter last year.

The top-line at Fox’s Cable Network Programming arm rose 11 percent on higher affiliate, syndication and advertising revenues. Segment operating income (before depreciation and amortization — or OIBDA) was up 3 percent. Domestic ad sales monies dipped, but international growth helped save the day.

At Fox broadcast, OIBDA plummeted 85 percent. The “Empire” home’s revenue slumped 6 percent, which can at least partially be blamed on lower NFL and World Series ratings.

Twenty-First Century Fox’s Filmed Entertainment wing was a mixed bag. On the one hand, its OIBDA dropped a glaring 66 percent as costs increased. But at least the company’s box office take went up with the critically beloved “Three Billboards Outside Ebbing, Missouri,” “The Shape of Water” and “The Post.” That all said, quarterly revenues ticked down just a bit year over year — we’ll call it close enough to flat.

“We delivered another quarter of solid top-line revenue growth including the further acceleration of gains in global affiliate revenues and despite challenging revenue comparisons for our TV segment,” Executive Chairmen Rupert and Lachlan Murdoch said on Wednesday. “Our results also reflect increased investment behind higher volumes of global sporting events as well as film releases from our studio, which led the industry in Golden Globe awards and Oscar nominations.”

“Looking ahead, we are focused on continuing to deliver value to our shareholders through achieving our near-term growth plans, completing our proposed acquisition of the balance of Sky, obtaining the required approvals for the successful completion of our transaction with Disney and planning for the exciting launch of the new ‘Fox,'” the father-son team added.

Shares of FOXA stock closed Wednesday at 36.20, down 60 cents per share. It recovered a bit after-hours, when these earnings were released.

Fox executives will host a conference call to discuss these results in greater detail at 4:30 p.m. ET.

The Walt Disney Company is in the process of buying most of Fox’s assets for more than $50 billion. They two companies are awaiting regulatory approval, and they expect to deal to close in about a year or so.