Despite concerns that a looming recession would depress ad sales, Fox Corp. is bucking the trend thus far. The media giant reported fiscal fourth-quarter results on Wednesday with revenue rising 5% from the prior year to $3.03 billion and diluted earnings per share of 55 cents.
The home to Fox broadcast network, Fox News, Fox Sports and Tubi reported net income of $308 million for the quarter ending June 30. Last quarter, the company reported $3.46 billion in revenue with a net income of $283 million and an EPS of 43 cents per share, which was slightly below Wall Street expectations.
Fox shares moved slightly lower in pre-market trading and is expected to open at $31.09 after closing at $31.35 in the previous session.
“We completed another successful year at FOX, with Fiscal 2022 results demonstrating the strength and durability of our core brands and their ability to deliver consistent audiences across the entirety of FOX,” CEO Lachlan Murdoch said in a statement. “These results validate the strategy we embarked on three years ago — to focus on live news and sports while investing in high growth digital initiatives to create a platform for ongoing growth.”
Affiliate fee revenues increased by 4% with 7% growth in the TV segment and 2% growth at the Cable Network Programming segment. Ad revenue also increased 7% largely driven by stronger pricing and higher ratings at Fox News Media, higher political advertising revenues at the Fox Television Stations and continued growth at streaming platform TUBI. Murdoch noted that the company is already seeing “very robust demand” at “record prices” for 2023 Super Bowl advertising, which will air on Fox.
For Fox’s full fiscal year, the company reported total revenues of $13.97 billion, an 8% rise from the $12.91 billion reported in the prior year. Fox also reported full year net income of $1.23 billion, which was down from the $2.20 billion reported last year due to the change in the company’s investments, according to the Q4 report. Company leadership pointed to the introduction of the USFL in the fiscal year as one contributor to lower net income.
Overall, Fox’s Q4 revenue was led by the Television Segment ($1.52 billion) and Cable Network Programming Segment ($1.46 billion). The company ended the fiscal year with $5 billion in cash.
Media stocks have been under pressure all year with Netflix, The Walt Disney Company, Warner Bros. Discovery and Paramount Global all seeping dips. Not only has Wall Street soured on the streaming model while legacy entertainment continues to decline, but decades-high inflation and fears about a looming recession have cast a dark shadow over the media industry.
Yet company executives are bullish on the fiscal 2023 year from a revenue, EBITDA and cash flow perspective. Murdoch said he expects the company is well positioned in the coming months to weather a souring economy.
“We begin Fiscal 2023 with strong momentum, supported by an enviable schedule of live sporting events and the mid-term election cycle, and bolstered by a best-in-class balance sheet,” he said. “These attributes will serve us well in navigating any macroeconomic uncertainty while continuing to create value for our shareholders.”
