FOX REPORTS SECOND QUARTER FISCAL 2023 REVENUES OF $4.61 BILLION

Rhea-AI Summary

Fox Corporation (Nasdaq: FOXA, FOX) reported a quarterly revenue of $4.61 billion, reflecting a 4% year-over-year increase. The company achieved a net income of $321 million, recovering from a net loss of $73 million in the previous year. Adjusted net income rose to $259 million from $77 million, while adjusted EBITDA surged 71% to $531 million. Fox declared a $0.25 semi-annual dividend and authorized a $3 billion stock repurchase program, raising total authorization to $7 billion. CEO Lachlan Murdoch emphasized confidence in their strategy and assets, particularly following strong sports programming and political advertising results.

Positive

• Quarterly revenue increased by 4% to $4.61 billion.
• Net income rose to $321 million from a loss of $73 million in the prior year.
• Adjusted EBITDA increased 71% to $531 million.
• Authorized an incremental $3 billion stock repurchase program, totaling $7 billion.

Negative

• Cable Network Programming segment EBITDA decreased to $353 million from $668 million year-over-year.
• Affiliate fee revenues decreased slightly by $13 million.

DECLARES $0.25 SEMI-ANNUAL DIVIDEND AND ANNOUNCES INCREMENTAL $3 BILLION STOCK REPURCHASE AUTHORIZATION INCLUDING $1 BILLION ACCELERATED SHARE REPURCHASE TRANSACTION

NEW YORK, Feb. 8, 2023 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX) ("FOX" or the "Company") today reported financial results for the three months ended December 31, 2022.

The Company reported total quarterly revenues of $4.61 billion, a 4% increase from the $4.44 billion reported in the prior year quarter. Affiliate fee revenues increased 1% led by 6% growth at the Television segment. Advertising revenues increased 4%, primarily reflecting the impact of the FIFA Men's World Cup ("World Cup") and strong NFL results at FOX Sports, higher political advertising revenues at the FOX Television Stations and continued growth at Tubi, partially offset by the absence of Thursday Night Football. Other revenues increased 13%, primarily due to the impact of the consolidation of entertainment production companies at the Television segment and higher FOX Nation subscription revenues.

The Company reported quarterly net income of $321 million as compared to a net loss of $73 million reported in the prior year quarter. The variance includes the change in fair value of the Company's investments recognized in Other, net. Net Income attributable to Fox Corporation stockholders was $313 million ($0.58 per share) as compared to a net loss of $85 million ($(0.15) per share) reported in the prior year quarter. Adjusted net income attributable to Fox Corporation stockholders¹ was $259 million ($0.48 per share), an increase of $182 million ($0.35 per share) from the $77 million ($0.13 per share) reported in the prior year quarter.

Quarterly Adjusted EBITDA² was $531 million, a 71% increase from the $310 million reported in the prior year quarter, reflecting the revenue increases noted above and lower expenses due to the absence of Thursday Night Football.

Commenting on the results and stock repurchase announcements, Executive Chair and Chief Executive Officer Lachlan Murdoch said:

"A compelling fall sports schedule, combined with an active midterm political news cycle, showcased the power and relevance of the FOX platform in our fiscal second quarter. Whether measured in terms of engagement, monetization or profitability, our focused strategy of live news and sports programming, coupled with our growing digital initiatives, continues to deliver. Today's announcement to increase our share repurchase authorization and our intention to immediately deploy a meaningful amount of capital in an accelerated share repurchase transaction reflects the confidence we have in our strategy, the quality of our assets and the strength of our financial position."

 

REVIEW OF OPERATING RESULTS
		Three Months Ended December 31,								Six Months Ended December 31,
		2022				2021				2022				2021
		$ Millions
Revenues by Component:
Affiliate fee		$	1,712			$	1,688			$	3,423			$	3,355
Advertising			2,503				2,408				3,723				3,538
Other			390				345				651				593
Total revenues		$	4,605			$	4,441			$	7,797			$	7,486
Segment Revenues:
Cable Network Programming		$	1,632			$	1,638			$	3,063			$	3,054
Television			2,934				2,759				4,648				4,340
Other, Corporate and Eliminations			39				44				86				92
Total revenues		$	4,605			$	4,441			$	7,797			$	7,486
Adjusted EBITDA:
Cable Network Programming		$	353			$	668			$	1,095			$	1,442
Television			256				(273)				665				86
Other, Corporate and Eliminations			(78)				(85)				(137)				(154)
Adjusted EBITDA3		$	531			$	310			$	1,623			$	1,374
Depreciation and amortization:
Cable Network Programming		$	17			$	17			$	34			$	27
Television			30				28				59				54
Other, Corporate and Eliminations			56				48				109				91
Total depreciation and amortization		$	103			$	93			$	202			$	172

 

CABLE NETWORK PROGRAMMING
		Three Months Ended December 31,								Six Months Ended December 31,
		2022				2021				2022				2021
		$ Millions
Revenues
Affiliate fee		$	1,026			$	1,039			$	2,055			$	2,065
Advertising			451				454				767				765
Other			155				145				241				224
Total revenues			1,632				1,638				3,063				3,054
Operating expenses			(1,097)				(837)				(1,661)				(1,360)
Selling, general and administrative			(186)				(137)				(315)				(261)
Amortization of cable distribution investments			4				4				8				9
Segment EBITDA		$	353			$	668			$	1,095			$	1,442

 

Cable Network Programming reported quarterly segment revenues of $1.63 billion as compared to the $1.64 billion reported in the prior year quarter. Affiliate fee revenues decreased slightly by $13 million as contractual price increases essentially offset the impact of net subscriber declines. Advertising revenues were broadly consistent with the prior year quarter as the headwind at FOX News Media due to the impact of elevated supply in the direct response marketplace was nearly offset by the broadcast of the World Cup at FOX Sports. Other revenues increased $10 million or 7%, primarily due to higher FOX Nation subscription revenues.

Cable Network Programming reported quarterly segment EBITDA of $353 million as compared to the $668 million reported in the prior year quarter. Expenses increased in the quarter, primarily due to the impact of the World Cup and higher programming rights amortization at FOX Sports, as well as higher legal costs and increased digital investment at FOX News Media.

 

TELEVISION
		Three Months Ended December 31,								Six Months Ended December 31,
		2022				2021				2022				2021
		$ Millions
Revenues
Advertising		$	2,052			$	1,954			$	2,957			$	2,773
Affiliate fee			686				649				1,368				1,290
Other			196				156				323				277
Total revenues			2,934				2,759				4,648				4,340
Operating expenses			(2,415)				(2,809)				(3,486)				(3,835)
Selling, general and administrative			(263)				(223)				(497)				(419)
Segment EBITDA		$	256			$	(273)			$	665			$	86

 

Television reported quarterly segment revenues of $2.93 billion, an increase of $175 million or 6% from the prior year quarter. Advertising revenues increased $98 million or 5%, primarily due to the broadcast of the World Cup, strong NFL ratings and pricing and additional broadcast windows at FOX Sports, higher political advertising revenues at the FOX Television Stations and continued growth at Tubi, partially offset by the absence of Thursday Night Football. Affiliate fee revenues increased $37 million or 6% driven by higher fees from third-party FOX affiliates. Other revenues increased $40 million or 26%, primarily due to the impact of the consolidation of entertainment production companies at FOX Entertainment.

Television reported quarterly segment EBITDA of $256 million, an increase of $529 million from the prior year quarter. Expenses were lower in the quarter due to the absence of Thursday Night Football, partially offset by the impact of the World Cup and higher programming rights amortization at FOX Sports, as well as increased digital investment at Tubi. 

DIVIDEND

The Company has declared a dividend of $0.25 per Class A and Class B share. This dividend is payable on March 29, 2023 with a record date for determining dividend entitlements of March 1, 2023.

SHARE REPURCHASE PROGRAM

The Company today announced that its Board of Directors has authorized incremental stock repurchases of an additional $3 billion of the Company's Class A Common Stock and Class B Common Stock (collectively, the "Common Stock"). With this increase, the Company's total stock repurchase authorization is now $7 billion. Subject to market conditions and other factors, the Company intends to repurchase in the open market or otherwise a combination of Class A Common Stock and Class B Common Stock. The program has no time limit and may be modified, suspended or discontinued at any time. The Company also announced that it intends to enter into an accelerated share repurchase transaction to repurchase $1 billion of Class A Common Stock under the stock repurchase program and to repurchase an additional $450 million of Common Stock during the remainder of fiscal 2023. To date, the Company has repurchased approximately $2.2 billion of Class A Common Stock and approximately $935 million of Class B Common Stock.

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, including statements regarding future share repurchases, 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, 2022 filed with the SEC on August 12, 2022, and subsequent Quarterly Reports on Form 10-Q.

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,
		2022				2021				2022				2021
		$ Millions, except per share amounts
Revenues		$	4,605			$	4,441			$	7,797			$	7,486
Operating expenses			(3,528)				(3,667)				(5,184)				(5,238)
Selling, general and administrative			(550)				(468)				(998)				(883)
Depreciation and amortization			(103)				(93)				(202)				(172)
Interest expense, net			(60)				(97)				(128)				(194)
Other, net4			73				(211)				(3)				(142)
Income (loss) before income tax (expense) benefit			437				(95)				1,282				857
Income tax (expense) benefit			(116)				22				(348)				(222)
Net income (loss)			321				(73)				934				635
Less: Net income attributable to noncontrolling interests			(8)				(12)				(16)				(19)
Net income (loss) attributable to Fox Corporation stockholders		$	313			$	(85)			$	918			$	616
Weighted average shares:			543				573				547				575
Net income (loss) attributable to Fox Corporation stockholders per share:		$	0.58			$	(0.15)			$	1.68			$	1.07

 

CONSOLIDATED BALANCE SHEETS
		December 31, 2022				June 30, 2022
Assets:		$ Millions
Current assets:
Cash and cash equivalents		$	4,058			$	5,200
Receivables, net			3,004				2,128
Inventories, net			1,300				791
Other			209				162
Total current assets			8,571				8,281
Non-current assets:
Property, plant and equipment, net			1,680				1,682
Intangible assets, net			3,114				3,157
Goodwill			3,556				3,554
Deferred tax assets			3,283				3,440
Other non-current assets			2,922				2,071
Total assets		$	23,126			$	22,185
Liabilities and Equity:
Current liabilities:
Accounts payable, accrued expenses and other current liabilities		$	2,543			$	2,296
Total current liabilities			2,543				2,296
Non-current liabilities:
Borrowings			7,208				7,206
Other liabilities			1,503				1,120
Redeemable noncontrolling interests			196				188
Commitments and contingencies
Equity:
Class A Common Stock, $0.01 par value			3				3
Class B Common Stock, $0.01 par value			2				3
Additional paid-in capital			8,836				9,098
Retained earnings			2,985				2,461
Accumulated other comprehensive loss			(219)				(226)
Total Fox Corporation stockholders' equity			11,607				11,339
Noncontrolling interests			69				36
Total equity			11,676				11,375
Total liabilities and equity		$	23,126			$	22,185

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
		Six Months Ended December 31,
		2022				2021
		$ Millions
Operating Activities:
Net income		$	934			$	635
Adjustments to reconcile net income to cash used in operating activities
Depreciation and amortization			202				172
Amortization of cable distribution investments			8				9
Equity-based compensation			32				47
Other, net			3				142
Deferred income taxes			152				143
Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables and other assets			(952)				(940)
Inventories net of programming payable			(420)				(494)
Accounts payable and accrued expenses			(152)				(214)
Other changes, net			(68)				(156)
Net cash used in operating activities			(261)				(656)
Investing Activities:
Property, plant and equipment			(153)				(121)
Acquisitions, net of cash acquired			-				(229)
Proceeds from dispositions, net			-				82
Purchase of investments			(50)				(28)
Other investing activities, net			(18)				-
Net cash used in investing activities			(221)				(296)
Financing Activities:
Repurchase of shares			(500)				(497)
Dividends paid and distributions			(155)				(150)
Sale of subsidiary noncontrolling interest			25				-
Other financing activities, net			(30)				(32)
Net cash used in financing activities			(660)				(679)
Net decrease in cash and cash equivalents			(1,142)				(1,631)
Cash and cash equivalents, beginning of year			5,200				5,886
Cash and cash equivalents, end of period		$	4,058			$	4,255

 

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, 2022 and 2021:

		Three Months Ended
		December 31, 2022								December 31, 2021
		Income				EPS				Income				EPS
		$ Millions, except per share data
Net income (loss)		$	321							$	(73)
Less: Net income attributable to     noncontrolling interests			(8)								(12)
Net income (loss) attributable to Fox     Corporation stockholders		$	313			$	0.58			$	(85)			$	(0.15)
Other, net5			(72)				(0.13)				212				0.37
Tax provision			18				0.03				(50)				(0.09)
As adjusted		$	259			$	0.48			$	77			$	0.13

 

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, net, 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).

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, 2022 and 2021:

		Three Months Ended December 31,								Six Months Ended December 31,
		2022				2021				2022				2021
		$ Millions
Net Income (loss)		$	321			$	(73)			$	934			$	635
Add:
Amortization of cable distribution investments			4				4				8				9
Depreciation and amortization			103				93				202				172
Interest expense, net			60				97				128				194
Other, net			(73)				211				3				142
Income tax expense (benefit)			116				(22)				348				222
Adjusted EBITDA		$	531			$	310			$	1,623			$	1,374

 

1	Excludes net income effects of Impairment and restructuring charges, adjustments to Equity earnings (losses) 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 earnings (losses) of affiliates.
5	Other, net presented above excludes Equity earnings (losses) of affiliates.

 

 

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SOURCE Fox Corporation

FAQ

What are the recent financial results for Fox Corporation for Q2 2023?

Fox Corporation reported Q2 2023 revenues of $4.61 billion, a 4% increase from the previous year, with a net income of $321 million.

What is the dividend declared by Fox Corporation in February 2023?

Fox Corporation declared a $0.25 semi-annual dividend payable on March 29, 2023.

How much has Fox Corporation authorized for stock repurchases?

Fox Corporation has authorized an additional $3 billion for stock repurchases, increasing its total authorization to $7 billion.

What contributed to the increase in Fox Corporation's revenue?

The increase in revenue was driven by strong advertising from the FIFA Men's World Cup and NFL, alongside growth at Tubi.

What was the adjusted net income for Fox Corporation for Q2 2023?

The adjusted net income for Fox Corporation for Q2 2023 was $259 million, up from $77 million in the prior year.