Fox Q2 Earnings Preview: What To Expect?
21st Century Fox (NYSE:FOX) is scheduled to announce its second quarter fiscal 2017 results on Monday, February 6. The company reported solid first quarter results, as both its revenue and earnings per share came in ahead of expectations. The media company’s overall revenue increased 7% year-over-year (y-0-y) to $6.5 billion, driven by strong revenue growth at the cable network and film segment. The company posted adjusted earnings of $0.51 per share in Q1 2017, which increased 34% y-o-y.
In the second quarter, Fox will surely benefit from Fox News, which continued to see strong ratings in the quarter. This could help boost advertising revenues in the quarter. However, we expect lower revenues from the company’s filmed entertainment division, as there were few big titles released during the quarter compared to the quarter a year ago. Fox studio grossed more than $315 million in the December quarter at the U.S. box-office, much lower than $471 million in the prior year quarter.
Fox News Continues To See Strong Ratings
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Fox’s cable networks likely performed well amid higher ratings at Fox News in Q2, which benefited the most from the U.S. Presidential election. Fox News was the most-watched basic cable network in the December quarter, and delivered year-over-year improvement in the key age 25-54 demographic. [1] The cornerstone of Fox News’ strength remained The O’Reilly Factor, which marked 192 months as the top cable news program with an average audience of 4.1 million. Moreover, The Kelly File also hit its own ratings-high in November with 3.4 million viewers. [2] Such strong ratings translate into solid profits, and therefore SNL Kagan has predicted a record-breaking profit of $1.67 billion for Fox News in this quarter.
Recent Development
In an effort to consolidate television programming and distribution under one roof, Fox acquired full control of Sky Plc for $14.1 billion. Sky, which is Europe’s top pay-TV company, provides services to 21.8 million customers across the U.K., Ireland, Italy, Austria and Germany. With this deal, Fox aims to connect its global content business with Sky’s direct-to-consumer capabilities, and form a powerful distribution platform in Europe for pay-TV and internet. Fox is looking to boost its earnings with the acquisition going forward. [3]
Reuters’ compiled analyst estimates forecast revenues of $7.8 billion and earnings of $0.49 per share for Q2 2017, implying growth of about 5% and 11%, respectively.
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Notes:- November 2016 Ratings: Fox News Has Most-Watched Month Since 2012, Adweek, Nov 30 2016 [↩]
- Donald Trump’s Election Delivers Massive Ratings For Cable News, Forbes, December 2016 [↩]
- 21st Century Fox Agrees to Buy Sky, Bloomberg, December 2016 [↩]