Fox beats profit estimates as ad market gains momentum
Reuters
Published Aug 08, 2023 08:04AM ET
Updated Aug 08, 2023 09:36AM ET
By Samrhitha A
(Reuters) -Fox Corp topped Wall Street expectations for quarterly profit on Tuesday as the Rupert Murdoch-controlled company benefited from an industry-wide uptick in the advertising market, sending the broadcaster's shares up nearly 5%.
Companies that had cut back on their marketing budgets are looking to advertise again, bolstered by hopes of improving consumer sentiment as inflation has begun to cool.
Fox's concentrated portfolio of news and sports positions it well compared with peers that have greater general entertainment exposure, according to analysts.
"We enter fiscal '24 from a position of strength despite headwinds facing our industry and the lingering effect of some macroeconomic uncertainty," CEO Lachlan Murdoch said.
Fox reported advertising revenue of $1.01 billion, beating expectations of $985.7 million, according to Visible Alpha.
"Underlying ad trends have shown signs of improvement over the last quarter. We are seeing an uptick in scatter driven largely by sports and national news is solid," Murdoch added.
Spending for political ads appears to have started early and is greater than previous election cycles, analysts have said.
The company reported quarterly revenue of $3.03 billion, largely in-line with market estimates, while net income attributable to stockholders stood at $375 million, compared with $306 million a year earlier.
On an adjusted basis, Fox earned 88 cents per share, beating estimates of 72 cents.
Fox, however, faces risks from its news, cord cutting (viewers canceling their subscriptions) and sports rights costs, analysts have said.
The departure of Tucker Carlson has resulted in Fox News' share of cable news slipping considerably, though it is not clear if the network's audience has defected cyclically or structurally, according to experts.
The company ended the quarter with $4.3 billion in cash and about $7.2 billion in debt.
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Written By: Reuters
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