Fox sees sales increase in the first quarter, but higher costs are putting pressure on profits
Fox Corporation said its first fiscal quarter profit fell due to higher operating costs, even as total revenue rose 5% or $174 million, coupled with higher advertising and distribution revenue.
The owner of Fox News Channel, Fox Sports and the Fox broadcast network said net income for top shareholders was $599 million, or $1.32 per share, compared with $827 million, or $1.78 per share, in the same period a year earlier. Adjusted for one-time items, first-quarter profit was $1.51
per share. The company also said its ad-supported streaming service Tubi turned profitable in the quarter, faster than previously expected.
Fox said it saw higher costs during the period due to increases in digital marketing and content costs and the write-off of entertainment programming rights.
“We are delivering for audiences with continued engagement growth across the portfolio, supporting the robust advertising demand we are seeing across sports, news, entertainment and Tubi,” Fox CEO Lachlan Murdoch said in a statement.
Fox has done well during a tough period for media companies by focusing largely on news and sports, two TV formats that continue to attract the large, live audiences advertisers crave. When it comes to streaming, Fox has focused most of its resources on Tubi, which is free and ad-supported and doesn’t require the billions of dollars for new, premium content that subscription-based rivals have. Fox launched a subscription streamer earlier this year, Fox One, that offers the programming it offers on its TV networks, but for cord-cutters who don’t subscribe to a cable or satellite service.
Fox said revenue from its cable business rose 4%, or $65 million, while distribution revenue rose 3% to $28 million. Advertising revenue increased 7%, or $24 million, due to higher prices for news programming.
The company’s linear TV business saw revenue increase 5%, or $97 million. Ad revenue rose 6%, or $59 million, tied to Tubi and the NFL. Distribution revenues increased $15 million or 2%.
More to come….
