Twenty-First Century Fox, Inc. FOXA reported fourth-quarter fiscal 2015 adjusted earnings of 39 cents per share that came ahead of the Zacks Consensus Estimate of 37 cents but fell 7.1% year over year.
Including one-time items, earnings came in at 6 cents per share, down 86% from the year-ago quarter.
Also total adjusted revenue of $6,205 million fell short of the Zacks Consensus Estimate of $6,481 million, while declining 9.3% year over year. Including revenues from Direct Broadcast segment in the prior year, revenues fell 26.3%. Shares of the company were down 7% yesterday.
Segment wise, Cable Network Programming grew 6.6% to $3,568 million, while both Filmed Entertainment and Television segments reported decline of 32% and 4.3% in revenues to $1,907 million and $987 million, respectively.
The company’s adjusted total segment operating income before depreciation and amortization (OIBDA) declined 4.7% year over year to $1,544 million in the quarter, owing to decreased OIBDA at Television and Filmed segments that ran down increases at Cable Network Programming.
Detailed Discussion
OIBDA at Cable Network Programming grew 1.3% to $1,218 million on the back of 7% growth in affiliate fees and advertising revenues However, it was partly offset by a 10% rise in costs, mainly programming due to FIFA Women’s World Cup, U.S. Open Golf Championship, and NASCAR along with a 4% negative impact from fluctuations in foreign exchange rate.
OIBDA contribution from domestic channels decreased 1%. At the domestic cable channels, affiliate revenues grew 12% due to continued growth across RSNs, FX Network and Fox News Channel and Fox Sports 1. Advertising revenues were down 2% year over year as lower hours for original programming at FX Networks offset growth in sports advertising revenues from FS1 and the RSNs.
On the other hand, OIBDA contribution from International cable channels increased 13% as performance improved across FIC and STAR networks, partly offset by the impact of currency headwinds. Affiliate revenues fell 2%, while advertising revenues rose 14% on the back of improved performances at FIC and STAR that offset negative forex impact of 9%.
Filmed Entertainment’s OIBDA was down 20.6% to $269 million in the quarter as there was no contribution from Shine. The television production business’ contribution was lower whereas theatrical revenues faced tougher comparison with the prior-year quarter in which Twenty-First Century Fox had releases such as Rio 2 and X-Men: Days of Future Past. Intensified currency headwinds added to the woes.
Television segment’s OIBDA fell 22% to $113 million due to drop in advertising revenues and higher programming costs due to U.S. Open Golf Championship and FIFA Women’s World Cup events.
Other Financial Details
Twenty-First Century Fox ended the year with cash and cash equivalents of $8,428 million. Total borrowings came in at $19,039 million and shareholders’ equity came in at $17,220 million, excluding non-controlling interest of $966 million.
On Aug 5, 2015, the company announced a new share repurchase authorization of $5 billion with a one-year time frame. In the quarter, Twenty-First Century Fox bought back 34 million shares for $1.2 billion, bringing the count to 172 shares worth nearly $6 billion. The company also announced quarterly dividend of 15 cents per share, payable on Oct 14, 2015 to shareholders as of Sep 9, 2015.
At present, Twenty-First Century Fox carries a Zacks Rank #4 (Sell). Some better-ranked media stocks include AMC Networks Inc. AMCX, Salem Media Group, Inc. SALM and Gray Television, Inc. GTN. AMC Networks and Salem Media Group sport a Zacks Rank #1 (Strong Buy) while Gray Television carries a Zacks Rank #2 (Buy). .
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