Fox Posts Q3 Revenue Gain on Strong Advertising, But Profit Misses Wall Street Projections

Fox Corp. reported fiscal third-quarter results on Tuesday with revenue rising 7% to $3.46 billion, driven by advertising strength at its Fox News Channel and local television stations across the country. But profit came in below Wall Street expectations.

The home to Fox broadcast network, Fox News, Fox Sports and Tubi reported net income of $283 million, or 50 cents per share, on revenue of $3.46 billion for the quarter ending March 31. Excluding items, Fox reported a profit of 81 cents per share.

Quarterly profit came in below Wall Street projections for 88 cents a share, but revenue beat the $3.39 billion expected by analysts. During the same quarter last year, Fox reported an adjusted profit of 88 cents a share on revenue of $3.22 billion.

“Fox’s third quarter results again demonstrate our capacity to deliver sustained and consistently strong revenue growth,” said Fox executive chairman and chief executive officer Lachlan Murdoch in a statement. “Our 7% topline growth in the quarter was propelled by pricing strength in both distribution and advertising revenues across our leadership brands, complemented by the powerful momentum we continue to see at Tubi.”

However, Wall Street sent Fox shares down 1% in premarket trading after the stock closed Monday at $30.57. Media stocks have been under pressure since last week when the market began a now four-day slump on fears about a recession.

Advertising again powered results for the quarter, with Fox’s key cable networks division increasing ad sales 20% to $339 million during the period. Fox News Channel generated the most growth, despite what the company described as “higher preemptions” because of breaking news coverage dominated by Russia’s Feb. 24 invasion of neighboring Ukraine.

The television business, including its flagship Fox network, reported ad sales increased 6% to $969 million compared to the year-ago period. Fox said the jump was due to continued strength from its Tubi streaming service, higher advertising prices fetched by Fox Network, and an extra NFL game broadcast during the quarter. Results were able to offset lower ratings for entertainment shows on Fox, though the company said sports continued to be a big draw.

But the biggest announcement out of the television business came during Murdoch’s call with Wall Street analysts when he announced Tom Brady will join Fox Sports as a commentator once his playing career is over. The quarterback announced his retirement from football in February, but then six weeks later said he was coming back to play for the Tampa Bay Buccaneers.

Murdoch wasn’t sure on the start date: “It’s entirely up to him for when he chooses to retire,” the executive said, noting he expects Brady to have an “exciting and stellar television career, but it’s up to him to make that choice when he sees fit.”