Fox Reports Second Quarter Fiscal 2021 Net Income Of $230 Million, Earnings Per Share Of $0.37
Fox Corporation (NASDAQ: FOXA, FOX) reported a net income of $230 million for the quarter ended December 31, 2020, down from $314 million year-over-year, attributed to prior year's gains. Adjusted net income rose 45% to $93 million, while revenues increased 8% to $4.09 billion, driven by advertising growth, particularly in political ads and the consolidation of Tubi, Inc. Adjusted EBITDA climbed 17% to $305 million. The company declared a dividend of $0.23 per share, to be paid on April 7, 2021.
- Adjusted net income rose 45% to $93 million.
- Revenues increased 8% to $4.09 billion.
- Advertising revenues soared 14%, driven by political advertising.
- Net income fell to $230 million from $314 million year-over-year.
- 14% decrease in other revenues due to lower sports sublicensing from college football cancellations.
NEW YORK, Feb. 9, 2021 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX) ("FOX" or the "Company") today reported financial results for the three months ended December 31, 2020.
The Company reported quarterly net income of
Total quarterly revenues increased
Quarterly Adjusted EBITDA2 increased
Commenting on the results, Executive Chairman and Chief Executive Officer Lachlan Murdoch said:
"Once again, the Company delivered exceptional operating and financial results. FOX Television Stations, FOX News Media and Tubi all experienced record highs in the December quarter, led by an unprecedented political advertising cycle at our local television stations, strong digital growth at FOX News Media and an influx of new advertisers at Tubi. We are looking forward to a return to normal entertainment and sports production schedules, and we are grateful to our colleagues and business partners who, during the pandemic, have ensured that our viewers are informed and engaged. Through it all, the fundamentals of our business and our strategic focus have never been stronger."
REVIEW OF OPERATING RESULTS | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues by Component: | ||||||||||||||||
Affiliate fee | $ | 1,518 | $ | 1,436 | $ | 3,051 | $ | 2,830 | ||||||||
Advertising | 2,282 | 2,010 | 3,251 | 3,051 | ||||||||||||
Other | 287 | 332 | 502 | 564 | ||||||||||||
Total revenues | $ | 4,087 | $ | 3,778 | $ | 6,804 | $ | 6,445 | ||||||||
Segment Revenues: | ||||||||||||||||
Cable Network Programming | $ | 1,488 | $ | 1,469 | $ | 2,813 | $ | 2,754 | ||||||||
Television | 2,556 | 2,266 | 3,906 | 3,622 | ||||||||||||
Other, Corporate and Eliminations | 43 | 43 | 85 | 69 | ||||||||||||
Total revenues | $ | 4,087 | $ | 3,778 | $ | 6,804 | $ | 6,445 | ||||||||
Segment EBITDA: | ||||||||||||||||
Cable Network Programming | $ | 571 | $ | 556 | $ | 1,352 | $ | 1,240 | ||||||||
Television | (185) | (214) | 272 | 37 | ||||||||||||
Other, Corporate and Eliminations | (81) | (81) | (153) | (160) | ||||||||||||
Adjusted EBITDA3 | $ | 305 | $ | 261 | $ | 1,471 | $ | 1,117 | ||||||||
Depreciation and amortization: | ||||||||||||||||
Cable Network Programming | $ | 12 | $ | 16 | $ | 25 | $ | 29 | ||||||||
Television | 26 | 14 | 51 | 29 | ||||||||||||
Other, Corporate and Eliminations | 32 | 27 | 62 | 49 | ||||||||||||
Total depreciation and amortization | $ | 70 | $ | 57 | $ | 138 | $ | 107 | ||||||||
CABLE NETWORK PROGRAMMING | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues | ||||||||||||||||
Affiliate fee | $ | 928 | $ | 957 | $ | 1,901 | $ | 1,896 | ||||||||
Advertising | 441 | 337 | 740 | 591 | ||||||||||||
Other | 119 | 175 | 172 | 267 | ||||||||||||
Total revenues | 1,488 | 1,469 | 2,813 | 2,754 | ||||||||||||
Operating expenses | (786) | (792) | (1,220) | (1,312) | ||||||||||||
Selling, general and administrative | (137) | (126) | (252) | (216) | ||||||||||||
Amortization of cable distribution investments | 6 | 5 | 11 | 14 | ||||||||||||
Segment EBITDA | $ | 571 | $ | 556 | $ | 1,352 | $ | 1,240 | ||||||||
Cable Network Programming reported quarterly segment revenues of
Cable Network Programming reported quarterly segment EBITDA of
TELEVISION | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues | ||||||||||||||||
Advertising | $ | 1,841 | $ | 1,673 | $ | 2,511 | $ | 2,460 | ||||||||
Affiliate fee | 590 | 479 | 1,150 | 934 | ||||||||||||
Other | 125 | 114 | 245 | 228 | ||||||||||||
Total revenues | 2,556 | 2,266 | 3,906 | 3,622 | ||||||||||||
Operating expenses | (2,540) | (2,284) | (3,254) | (3,227) | ||||||||||||
Selling, general and administrative | (201) | (196) | (380) | (358) | ||||||||||||
Segment EBITDA | $ | (185) | $ | (214) | $ | 272 | $ | 37 | ||||||||
Television reported quarterly segment revenues of
Television reported a quarterly segment EBITDA loss of
DIVIDEND
The Company has declared a dividend of
SHARE REPURCHASE PROGRAM
On November 6, 2019, the Company announced the authorization of a
IMPACT OF COVID-19
The outbreak of the COVID-19 pandemic has resulted in widespread and continuing negative impacts on the macroeconomic environment and disruption to the Company's business. Weak economic conditions and increased volatility and disruption in the financial markets pose risks to the Company and its business partners, including advertisers whose expenditures tend to reflect overall economic conditions. The COVID-19 pandemic has caused some of the Company's advertisers to reduce their spending, and future declines in the economic prospects of advertisers or the economy in general could negatively impact their advertising expenditures further. Depending on the duration and severity of the recession, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to multi-channel video programming distributor services, that adversely affect the Company's affiliate fee and advertising revenues. In addition, the Company's business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights were cancelled or postponed and the production of certain entertainment content the Company distributes was suspended. There may be additional content disruptions in the future, and depending on their duration and severity, these disruptions could materially adversely affect the Company's future advertising revenues and, over a longer period, its future affiliate fee revenues. To the extent the pandemic further negatively impacts the Company's ability to air sports events, it could result in a significantly greater adverse effect on the Company's business, financial condition or results of operations than the Company has experienced thus far. In addition, shifting sports schedules may negatively impact the Company's ability to attract viewers and advertisers to its sports and entertainment programming.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook" and similar expressions are used to identify these forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this press release due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company's businesses, including the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
Statements in this press release speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this press release or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company's expectations, except as required by law.
To access a copy of this press release through the Internet, access Fox Corporation's corporate website located at http://www.foxcorporation.com.
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
$ Millions, except per share amounts | ||||||||||||||||
Revenues | $ | 4,087 | $ | 3,778 | $ | 6,804 | $ | 6,445 | ||||||||
Operating expenses | (3,346) | (3,091) | (4,514) | (4,559) | ||||||||||||
Selling, general and administrative | (442) | (431) | (830) | (783) | ||||||||||||
Depreciation and amortization | (70) | (57) | (138) | (107) | ||||||||||||
Impairment and restructuring charges | - | - | (35) | (9) | ||||||||||||
Interest expense | (99) | (90) | (198) | (180) | ||||||||||||
Interest income | 2 | 8 | 3 | 25 | ||||||||||||
Other, net4 | 172 | 302 | 691 | 287 | ||||||||||||
Income before income tax expense | 304 | 419 | 1,783 | 1,119 | ||||||||||||
Income tax expense | (74) | (105) | (436) | (292) | ||||||||||||
Net income | 230 | 314 | 1,347 | 827 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (6) | (14) | (17) | (28) | ||||||||||||
Net income attributable to Fox Corporation stockholders | $ | 224 | $ | 300 | $ | 1,330 | $ | 799 | ||||||||
Weighted average shares: | 598 | 620 | 601 | 622 | ||||||||||||
Net income attributable to Fox Corporation stockholders per share: | $ | 0.37 | $ | 0.48 | $ | 2.21 | $ | 1.28 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, | June 30, | |||||||
Assets: | $ Millions | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,502 | $ | 4,645 | ||||
Receivables, net | 2,776 | 1,888 | ||||||
Inventories, net | 1,020 | 856 | ||||||
Other | 142 | 97 | ||||||
Total current assets | 8,440 | 7,486 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 1,606 | 1,498 | ||||||
Intangible assets, net | 3,170 | 3,198 | ||||||
Goodwill | 3,408 | 3,409 | ||||||
Deferred tax assets | 3,963 | 4,358 | ||||||
Other non-current assets | 2,167 | 1,801 | ||||||
Total assets | $ | 22,754 | $ | 21,750 | ||||
Liabilities and Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable, accrued expenses and other current liabilities | $ | 2,213 | $ | 1,906 | ||||
Non-current liabilities: | ||||||||
Borrowings | 7,949 | 7,946 | ||||||
Other liabilities | 1,469 | 1,482 | ||||||
Redeemable noncontrolling interests | 202 | 305 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Class A common stock, | 3 | 3 | ||||||
Class B common stock, | 3 | 3 | ||||||
Additional paid-in capital | 9,655 | 9,831 | ||||||
Retained earnings | 1,657 | 674 | ||||||
Accumulated other comprehensive loss | (401) | (417) | ||||||
Total Fox Corporation stockholders' equity | 10,917 | 10,094 | ||||||
Noncontrolling interests | 4 | 17 | ||||||
Total equity | 10,921 | 10,111 | ||||||
Total liabilities and equity | $ | 22,754 | $ | 21,750 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Six Months Ended | ||||||||
2020 | 2019 | |||||||
$ Millions | ||||||||
Operating Activities: | ||||||||
Net income | $ | 1,347 | $ | 827 | ||||
Adjustments to reconcile net income to cash provided by (used in) operating activities | ||||||||
Depreciation and amortization | 138 | 107 | ||||||
Amortization of cable distribution investments | 11 | 14 | ||||||
Impairment and restructuring charges | 35 | 9 | ||||||
Equity-based compensation | 75 | 65 | ||||||
Other, net | (691) | (287) | ||||||
Deferred income taxes | 421 | 246 | ||||||
Change in operating assets and liabilities, net of acquisitions and dispositions | ||||||||
Receivables and other assets | (1,011) | (703) | ||||||
Inventories net of program rights payable | (60) | (354) | ||||||
Accounts payable and accrued expenses | 156 | (130) | ||||||
Other changes, net | (184) | (50) | ||||||
Net cash provided by (used in) operating activities | 237 | (256) | ||||||
Investing Activities: | ||||||||
Property, plant and equipment | (242) | (110) | ||||||
Acquisitions, net of cash acquired | - | (260) | ||||||
Purchase of investments | (86) | - | ||||||
Other investing activities, net | (1) | 21 | ||||||
Net cash used in investing activities | (329) | (349) | ||||||
Financing Activities: | ||||||||
Repurchase of shares | (416) | (421) | ||||||
Non-operating cash flows from (to) The Walt Disney Company | 116 | (45) | ||||||
Settlement of Divestiture Tax prepayment | 462 | - | ||||||
Dividends paid and distributions | (176) | (169) | ||||||
Other financing activities, net | (37) | (3) | ||||||
Net cash used in financing activities | (51) | (638) | ||||||
Net decrease in cash and cash equivalents | (143) | (1,243) | ||||||
Cash and cash equivalents, beginning of year | 4,645 | 3,234 | ||||||
Cash and cash equivalents, end of period | $ | 4,502 | $ | 1,991 | ||||
NOTE 1 – ADJUSTED NET INCOME AND ADJUSTED EPS
The Company uses net income and earnings per share ("EPS") attributable to Fox Corporation stockholders excluding net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, Other, net, and tax provision adjustments ("Adjusted Net Income" and "Adjusted EPS" respectively) to evaluate the performance of the Company's operations exclusive of certain items that impact the comparability of results from period to period.
Adjusted Net Income and Adjusted EPS may not be comparable to similarly titled measures reported by other companies. Adjusted Net Income and Adjusted EPS are not measures of performance under GAAP and should be considered in addition to, and not as substitutes for, net income attributable to Fox Corporation stockholders and EPS as reported in accordance with GAAP. However, management uses these measures in comparing the Company's historical performance and believes that they provide meaningful and comparable information to management, investors and equity analysts to assist in their analysis of the Company's performance relative to prior periods and the Company's competitors.
The following table reconciles net income and EPS attributable to Fox Corporation stockholders to Adjusted Net Income and Adjusted EPS for the three months ended December 31, 2020 and 2019:
Three Months Ended | ||||||||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||
Income | EPS | Income | EPS | |||||||||||||
$ Millions, except per share data | ||||||||||||||||
Net income | $ | 230 | $ | 314 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (6) | (14) | ||||||||||||||
Net income attributable to Fox Corporation stockholders | $ | 224 | $ | 0.37 | $ | 300 | $ | 0.48 | ||||||||
Other, net5 | (175) | (0.29) | (307) | (0.50) | ||||||||||||
Tax provision | 44 | 0.07 | 71 | 0.11 | ||||||||||||
Rounding | - | 0.01 | - | 0.01 | ||||||||||||
As adjusted | $ | 93 | $ | 0.16 | $ | 64 | $ | 0.10 | ||||||||
NOTE 2 – ADJUSTED EBITDA
Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, Interest income, Other, net and Income tax expense.
Management believes that information about Adjusted EBITDA assists all users of the Company's Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results. Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company's business and its enterprise value against historical data and competitors' data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences and the impact of COVID-19).
Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
The following table reconciles net income to Adjusted EBITDA for the three and six months ended December 31, 2020 and 2019:
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
$ Millions | ||||||||||||||||
Net income | $ | 230 | $ | 314 | $ | 1,347 | $ | 827 | ||||||||
Add: | ||||||||||||||||
Amortization of cable distribution investments | 6 | 5 | 11 | 14 | ||||||||||||
Depreciation and amortization | 70 | 57 | 138 | 107 | ||||||||||||
Impairment and restructuring charges | - | - | 35 | 9 | ||||||||||||
Interest expense | 99 | 90 | 198 | 180 | ||||||||||||
Interest income | (2) | (8) | (3) | (25) | ||||||||||||
Other, net | (172) | (302) | (691) | (287) | ||||||||||||
Income tax expense | 74 | 105 | 436 | 292 | ||||||||||||
Adjusted EBITDA | $ | 305 | $ | 261 | $ | 1,471 | $ | 1,117 | ||||||||
1 | Excludes net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, Other, net and tax provision adjustments. See Note 1 for a description of adjusted net income and adjusted earnings per share attributable to Fox Corporation stockholders, which are considered non-GAAP financial measures, and a reconciliation of reported net income and earnings per share attributable to Fox Corporation stockholders to adjusted net income and adjusted earnings per share attributable to Fox Corporation stockholders. |
2 | Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
3 | Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
4 | Other, net presented above includes Equity losses of affiliates. |
5 | Other, net presented above includes Equity losses of affiliates. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/fox-reports-second-quarter-fiscal-2021-net-income-of-230-million-earnings-per-share-of-0-37--301224893.html
SOURCE Fox Corporation
FAQ
What were Fox Corporation's earnings results for Q4 2020?
How did Fox Corporation's revenue perform in Q4 2020?
What is the future outlook for Fox Corporation?
When is the dividend payable for Fox Corporation?
