02:13 PM EDT, 08/06/2024 (MT Newswires) -- Fox (FOX, FOXA) on Tuesday reported a surprise increase in fiscal fourth-quarter earnings and raised its dividend, sending the media company's shares higher.
Adjusted earnings rose to $0.90 a share for the quarter through June 30 from $0.88 a year earlier, compared with the $0.81 consensus compiled by Capital IQ. Revenue increased 2% to $3.09 billion, just shy of Wall Street's $3.1 billion view.
Total company affiliate fee revenue increased 5% amid growth at the television and cable segments supported by the recent cycle of affiliate renewals, Chief Financial Officer Steven Tomsic said on an earnings conference call, according to a Capital IQ transcript. Total company advertising revenue was flat, with sales generated from the company's "Summer of Soccer" offering and growth at streaming service Tubi offset by lower ratings and pricing of the Fox Network, Tomsic added.
Tubi reached a record 81 million monthly active users and increased total view time by 17% amid "an expansive" library, Fox Chief Executive Lachlan Murdoch said on the call. Audience levels returned to growth at the Fox News channel in the fourth quarter driven by political coverage and "strong" PrimeTime lineup, Murdoch added.
Full-year adjusted EPS fell to $3.43 from $3.51 a year earlier, but topped the Street's $3.30 view. Revenue dropped to $13.98 billion from $14.91 billion, lagging the Street's $13.99 billion estimate.
Fox increased its semi-annual dividend to $0.27 per share from $0.26, payable Sept. 25.
"Our foundation for this coming fiscal year is solid as we carry the momentum from fiscal (2024) into another year of major events, particularly for our news and sports businesses," Murdoch told analysts.
Fox's class A and B shares were up around 7% each in Tuesday afternoon trade.
A potential economic recession could affect advertising cost per thousand impressions or viewers, or CPM, overall, MoffettNathanson said in a note to clients. "Even if we see some impact to Tubi, it remains relatively protected given its lower CPMs relative to its peers and a small slice of Fox's revenue pie." CPM is a pricing model used in programmatic advertising.
"Recession or not, political ad dollars will flow into Fox News, and Fox broadcast's sports content makes it a must-have for advertisers in any year, but particularly in (2025), with the broadcast network having the Super Bowl," the brokerage wrote.
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