Fox Touts Modest Ad Sales Gains, Stock Price Sinks

Twenty-First Century Fox reported big TV broadcast advertising gains in its most recently quarterly financial period  -- largely due to airing the Super Bowl. But that didn’t mean much to investors.

For its recent fiscal third-quarter earnings period, Fox posted nearly a 40% rise in domestic advertising revenues. All Super Bowl programming pulled in $500 million in gross advertising revenues. Worldwide company-wide advertising grew 16% to $2.3 billion.

At the same time, there were lower entertainment advertising revenues on the Fox network, due to the absence of “American Idol,” which had its last season in 2016.

“Advertising for the segment was likely down by at least high-single digits, excluding the Super Bowl,” writes Brian Wieser, senior research analyst for Pivotal Research Group. “However, profitability was strong in the quarter, rising from $125 million to $190 million.”

Total revenues from broadcast TV network and TV station business were up 30% to $1.7 billion. Wieser says that excluding the Super Bowl means TV revenue fell by 3%.



Looking forward, James Murdoch, CEO of 21st Century Fox said of the national TV ad business: “National scatter remains strong.” He added that local TV ad sales has been weaker, with lower automotive advertising.

Cable network revenue grew 2% to $4.02 billion. U.S. cable network advertising revenue was flat. Affiliate revenue improved 8% due to increases for Fox News, FS1, the regional sports networks, and FX Networks.

While there were higher ratings at Fox News Channel and its cable sports network FS1 during the period, revenues were lower at its National Geographic Partners businesses.

Fox Filmed Entertainment -- including theatrical and home entertainment revenues -- sank 2.8% to $2.3 billion. Much of this was due to unfavorable comparisons to the year-ago period, when its big revenue earning “Deadpool” film premiere.

Overall Fox revenues grew 5% in revenue $7.23 billion, with net income sinking 6% to $870 million.  Fox's stock price on Wednesday closed down 1.2% to land at $27.10. After market trading, pushed the price down by more than 4%.

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