Fox Corp. rode a surge in political ad spending and continued growth in streaming in its fiscal first quarter, posting financial results above Wall Street analysts’ expectations.
Adjusted net income came in at $1.21 per share, up a dime from the year-ago quarter and well ahead of analysts’ consensus forecast for $1.12. Total revenue of $3.19 billion, up 5% from a year ago, also cleared the bar.
Fox credited a surge in political advertising and the continued growth of Tubi, its ad-supported streaming service. Spending on political ads in September set a new company record.
While political ads aren’t broken out on the balance sheet, Fox is uniquely positioned to benefit, particularly in mid-term and presidential cycles, given its ownership of Fox News and a cash-generating portfolio of local stations. The top line for all advertising climbed to $1.22 billion in the quarter, up from $1.13 billion.
The cable network programming unit posted revenue of $1.43 billion, up 1%. While affiliate fee revenue increased due to contractual price increases, net subscriber declines continued to take a toll. The division also recorded a 9% lift in “other revenue,” which the company attributed mainly to primarily due to higher Fox Nation subscription revenues. Fox Corp. has never disclosed subscriber numbers for the Fox News companion service.
In the television division, which includes stations and the flagship broadcast network, ad revenue increased 11%, which the company attributed to political spending at stations, growth in Tubi and “continued strength in pricing” at the network. Offsetting those positives were lower ratings, the company conceded. Affiliate fee revenue inched up 6%, driven by increases in fees from third-party Fox affiliates and higher average rates, partially offset by the impact of net subscriber declines, at the company’s owned stations.
“These results demonstrate the continued strength of our established businesses along with the momentum across our digital portfolio,” CEO Lachlan Murdoch said in the earnings release. “It is a strong start to what promises to be a notable fiscal year of prominent scheduled events across the company underscoring the importance of our live and event programming to viewers. While we are mindful of current macroeconomic conditions, the durability of our brands and Fox’s ability to deliver audiences at scale position us well to navigate this uncertainty while continuing to create value for our shareholders.”
Murdoch his father, Rupert Murdoch, and other key stakeholders are mulling a recombination of Fox Corp. and News Corp., the digital media parent of the Wall Street Journal, HarperCollins and other assets, the companies disclosed last month.