Fox Corp. posted a strong September quarter including a 12% pop in sales to $3.05 billion, beating Wall Street forecasts and fueled by a 17% uptick in ad revenue. It cited continued growth at Tubi, the return of a full schedule of live events at Fox Sports and more scripted programming at Fox Entertainment — all versus last year when the industry was still staggering under Covid.
“We have made a strong start to the 2022 fiscal year with broad-based operating momentum led by the return of a full slate of live events at Fox Sports, ratings leadership at Fox News and exceptional progress at Tubi. As audiences migrate to live news, sports and streaming, it underscores the strategy and priorities that have defined our short history at Fox. We remain focused on bolstering our core brands and leveraging the unique assets that distinguish us to further propel growth and drive value for our shareholders,” said CEO Lachlan Murdoch.
Affiliate revenues increased 9%, with 14% growth at the television segment and 5% growth at the cable network programming for what was the company’s fiscal first quarter.
Net income of $701 million was down from $1.12 billion on a one-time gain that was recorded the year earlier and higher programming costs that are a constant across media companies this earnings period as production ramped back up.
Murdoch will lead a call with analysts at 4:30 p.m. ET.
The company has been a Wall Street favorite. Alan Gould of Loop Capital thinks the shares “have the most compelling risk/reward in our large-cap universe” given a strong balance sheet, share repurchases and focused strategy of sports and news that should benefit from strong political advertising and engagement next year, as well as a Super Bowl in FY 2023 and the elimination of Thursday Night Football losses, he said in his latest Fox report from September.
Specifically, everything points to a record mid-term political spending year with the 2022 races could potentially topping the 2020 spending – a political environment that should also benefit engagement at Fox News. It’s a big renewal year for Fox, with roughly one-third of the subscriber base up for renewals. The company should save about $350 million by no longer carrying Thursday Night Football.
A potential catalyst should be resolving its arbitration with Flutter, which should help highlight the value of its gaming assets, Gould said.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.