Twenty-First Century Fox, Inc. FOXA reported first-quarter fiscal 2016 adjusted earnings of 38 cents per share that came ahead of the Zacks Consensus Estimate of 37 cents.
Including one-time items, earnings came in at 34 cents per share, down 29.2% from the year-ago quarter.
Also, total adjusted revenue of $6,077 million fell short of the Zacks Consensus Estimate of $6,464 million while declining 6.3% year over year. Including revenues from the Direct Broadcast segment in the prior year, revenues fell 22.9%.
Segment wise, Cable Network Programming revenues grew 7.2% to $3,464 million. Filmed Entertainment revenues declined 27.9% to $1,785, whereas Television segment reported net revenues of $1,049, flat year over year.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) declined 13.7% year over year to $1,535 million in the fiscal quarter, owing to decreased OIBDA at Filmed segments that ran down increases at Cable Network Programming.
Detailed Discussion
OIBDA at Cable Network Programming jumped 26% to $1,306 million on the back of 7% growth in affiliate fees and higher advertising revenues along with decline in expenses. The decline in expenses was due to absence of the cricket match between India and England broadcasted on STAR Sports last year. Foreign currency fluctuation affected the segment’s OIBDA growth by 5%.
OIBDA contribution from domestic channels increased 19% owing to sturdy OIBDA growth at FX Networks, Fox News and FS1.
Further, at the domestic cable channels, affiliate revenues grew 11% due to continued growth across FS1, FX Network and Fox News Channel and Fox Sports 1. Advertising revenues were up 4% due to robust growth at sports channels and Fox News
On the other hand, OIBDA contribution from International cable channels increased 53% due to strong local currency growth, offset by the impact of currency headwinds. Affiliate and advertising revenues fell 1% each as 11% growth in local currency at STAR as well as the Fox International Channels (“FIC”) was negated by 12% forex impact.
Filmed Entertainment’s OIBDA was down 63.7% to $149 million in the quarter as there was no contribution from Shine and being affected by lesser worldwide theatrical revenues. Intensified currency headwinds added to the woes.
Television segment’s OIBDA increased 13% to $196 million driven by decrease in operating cost at the FOX Broadcast Network as well as TV stations, which partially offset increase in marketing expenses at the FOX Broadcast Network.
Other Financial Details
Twenty-First Century Fox ended the quarter with cash and cash equivalents of $5,830 million. Total borrowings came in at $19,011 million and shareholders’ equity came in at $16,255 million, excluding non-controlling interest of $974 million.
On Aug 5, 2015, the company announced a new share repurchase authorization of $5 billion with a one-year time frame. In the fiscal first-quarter, Twenty-First Century Fox bought back 66 million shares for $2.0 billion.
At present, Twenty-First Century Fox carries a Zacks Rank #3 (Hold). Some better-ranked media stocks include Lions Gate Entertainment Corp. LGF, News Corp. NWSA and World Wrestling Entertainment Inc. WWE. All these stocks hold a Zacks Rank #2 (Buy).
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