By Jaspreet Singh
May 11 (Reuters) – Fox Corp beat analysts’ estimates for third-quarter revenue and profit on Monday, driven by robust growth in its Tubi streaming service and increased fees from cable and satellite subscribers.
Shares of the company rose more than 3% as Fox executives expressed optimism about a “very healthy upfront” market, with strong underlying advertising trends.
Overall ad revenue declined about 24% in the three months ended March 31, compared with the same quarter last year when the company broadcast “Super Bowl LIX.”
“Excluding the impact of the Super Bowl and other NFL (National Football League) post-season schedule changes, our total company advertising revenue would have grown (by) double digits over the prior year quarter,” CFO Steve Tomsic said on a post-earnings call.
CEO Lachlan Murdoch said Fox is aware of speculation regarding the NFL’s potential interest in renegotiating and extending current deals, but the company has had “no substantive discussions” with the league.
Fox acquired the rights to two more NFL regular-season games, including one overseas, creating a historic triple-header on broadcast TV.
“The dramatic rights increases that are upcoming will make it challenging for Fox to keep offering this much sports without absorbing financial losses,” said Ross Benes, senior analyst at Emarketer.
Revenue of $3.99 billion beat LSEG-compiled analysts’ average estimate of $3.82 billion. Its adjusted profit per share of $1.32 exceeded estimates of 97 cents.
Ad revenue for its cable network programming rose 5%, primarily driven by increased news pricing and the broadcast of the World Baseball Classic, despite being partially offset by lower ratings.
Tubi’s quarterly revenue rose 23% and total view time increased by 19%, helped by an expanded library of creator-led titles and Tubi originals. It now features more than 220 creators with over 17,000 episodes.
Fox expects strong political ad revenue in the upcoming midterm election cycle, with local stations in key battlegrounds like Florida and Georgia expected to be strong beneficiaries.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel)
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