Fox Corp. reported sales of $4.4 billion in its fiscal second quarter ended in December, up 9% from the year before, beating Wall Street forecasts and citing sports, Fox Network pricing and AVOD streamer Tubi, which had its best performing quarter.
Despite the revenue boost, the company swung to a net loss of $73 million from a $230 million profit — or a negative 15 cents a share from 37 cents. It said the variance was primarily due to the change in fair value of the company’s investments, namely Flutter. Adjusted for that and other items, net income was $77 million, or 13 cents a share, vs $93 million, or 16 cents. Programming investment rose across the board last quarter.
Affiliate revenues increased 11% with 12% growth at cable network programming segment and 10% growth in broadcasting. Advertising revenues rose 6% on continued pricing strength at the Fox Network, underpinned by the sports portfolio and Tubi growth, the company said. “Other” revenues were up 20%, led by higher sports sublicensing revenues, were hit by Covid in the prior year quarter.
CEO Lachlan Murdoch said “strong results and broad-based operating momentum are underpinned by the most valuable news franchise in the country, the leading live sports franchise, our top broadcast network reinforced by a strategic stations portfolio, as well as the emerging leader in AVOD. This focused portfolio is delivering consistent growth for our shareholders in a thoughtful and disciplined manner.”
The company recently launched Fox Weather, which just made its debut on Amazon News on Fire TV and Fire Tablet and was added to the channel lineup of YouTube TV last week. It’s available on The Roku Channel and will launch later this month on Xumo and fuboTV.
Drilling down, cable network programming reported quarterly segment revenues of $1.64 billion, an increase of $150 million or 10% from the amount reported in the prior year quarter. Affiliate revenues increased $111 million or 12%, primarily due to contractual price increases, including the impact of distribution agreement renewals, and the absence of the prior year accrual for potential distribution credits as a result of cancelled college football games.
Advertising revenues increased $13 million or 3%, primarily due to continued pricing strength at Fox News, despite the absence of the prior year election cycle, and stronger pricing and additional MLB playoff games at the national sports networks. Other revenues increased $26 million or 22%, driven by higher sports sublicensing revenues, which were impacted by Covid-19 in the prior year quarter, and higher Fox Nation subscription revenues.
Revenue increases were partially offset by higher expenses reflecting higher programming rights amortization at the national sports networks and increased digital investment at Fox News Media.
Television reported quarterly segment revenues of $2.76 billion, an increase of $203 million or 8% from the amount reported in the prior year quarter. Advertising revenues increased $113 million or 6% despite the comparative impact of record political advertising revenues in the prior year quarter. This growth was primarily due to continued pricing strength at the Fox Network underpinned by the strength of the sports portfolio, continued growth at Tubi, and the benefit of the ongoing recovery in the base market at the Fox Television Stations following the disruptions caused by Covid in the prior year quarter.
Affiliate revenues increased $59 million or 10%, driven by higher average rates at the company’s owned and operated stations and increases in fees from affiliates. Other revenues increased $31 million or 25%, primarily due to higher content revenues at Fox Entertainment, as well as the acquisitions of MarVista Entertainment and TMZ.
Television reported a quarterly segment EBITDA loss of $273 million versus the $185 million as the revenue increases were more than offset by higher expenses. The increase in expenses primarily reflects higher sports and entertainment programming rights amortization at the Fox Network, including comparisons to the disruptions caused by COVID-19 in the prior year quarter, and increased digital investment at Tubi.
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