Fox Corp. Surprises with Strong Q4 Performance, Defying Political Ad Slump
Despite the absence of political ads, Fox Corp. defied expectations in the fourth quarter, posting impressive revenue figures. The company's success can be attributed to a seven-game World Series in October and the continued growth of Fox News and Tubi streaming service.
In the October-to-December quarter, Fox Corp. reported a 2% revenue increase year-over-year, reaching a total of $5.18 billion. Earnings per share stood at 52 cents, and adjusted earnings reached 81 cents, surpassing Wall Street analysts' predictions.
Advertising revenue, despite the absence of political ads, saw a 1% increase. This was largely due to higher pricing for sports and news content, including additional baseball postseason games, which helped compensate for the political ad deficit and lower ratings.
Distribution revenue experienced a 4% growth, primarily driven by a 5% increase in the Cable Network Programming unit. Content and other revenues remained stable compared to the previous year.
However, the Television division, encompassing broadcast networks, local stations, and Tubi, witnessed a slight revenue decline to $2.937 billion. This downturn is notable as the fall quarter typically boasts high revenue due to college football and NFL games.
Distribution revenues inched up 1%, with higher rates at owned and operated stations and increased fees from third-party affiliates. Content and other revenues decreased to $142 million from $175 million in the prior year, mainly due to lower entertainment content revenues affected by delivery timing.
EBITDA for Television fell to $143 million from $205 million in the previous quarter, attributed to higher expenses. These expenses were driven by increased sports programming rights amortization, production costs, and digital content costs, partially offset by lower entertainment programming rights and production costs.
CEO Lachlan Murdoch praised the results as a testament to a strategic approach and successful execution, highlighting the strength of Fox's leadership brands in news, sports, streaming, and entertainment.
