What To Expect From 21st Century Fox’s Earnings
21st Century Fox (NYSE:FOX) is scheduled to announce its first quarter fiscal 2017 results on Wednesday, November 2. The company ended fiscal 2016 on a mixed note, as its fourth quarter earnings per share came in ahead of expectations but revenue missed. Overall, Fox’s fiscal 2016 total adjusted revenues grew by 1% year-over-year (y-o-y) to $27.3 billion, primarily driven by a rise in its cable networks and television segments and partially offset by a decline in the film business. The company posted adjusted earnings of $1.73 per share in FY 2016 compared to last year’s $1.72.
Important Growth Drivers – Advertising Business and Focus On Licensing Content
Fox’s advertising and subscription business accounts for more than 50% of the company’s valuation, according to our estimates. We expect advertising revenues to grow by 6% in fiscal 2017, due to favorable market conditions such as the U.S. presidential election season.
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Fox Sports had some good ratings due to the coverage of Copa America games in fiscal 2016. Fox News was the most-watched basic cable network for Q3 2016, and delivered year-over-year improvement in the key age 25-54 demographic. [1] The election season helped the network claim the No.1 spot among cable networks during the third quarter, ahead of ESPN, USA and TNT.
Fox’s focus on licensing content to streaming service providers could boost its bottom line in fiscal 2017. The media giant has a 30% stake in video streaming service provider Hulu already, which serves more than 11 million subscribers, and we expect subscriber additions to pick up further due to content expansion. Fox’s online content strategy has already started showing momentum and could drive results in FY 2017.
In the upcoming earnings, the compiled analyst estimates forecast revenues of $6.47 billion and earnings of $0.43 per share in the first quarter.
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Notes:- Q3 2016 Ratings: Fox News Is Most-Watched Cable Network, adweek.com, Sept 2016 [↩]