Updated Aug 6 at 10:12am ET.
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Fox reported quarterly earnings of $1.79 per share, which was well ahead of the $1.44 analysts expected. Revenue reached $4.21 billion for the quarter, driven by a year that included the FIFA Men's World Cup. The company is also launching a new streaming service called FOX One to reach more viewers outside of traditional cable.
The biggest news is the planned acquisition of Roku, a company that makes streaming devices and software. This is a major shift for Fox, which has historically stayed smaller than rivals like Disney. By owning Roku, Fox gains direct control over how millions of people access streaming apps, which should help it grow its own ad-supported services like Tubi.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company is scheduled to report its results for the quarter today. Analysts expect earnings of about 1.44 dollars per share on roughly 3.64 billion dollars in revenue. Fox has a long streak of beating these analyst targets, having done so in each of the last eight quarters.
Beyond the headline numbers, the focus remains on how well the company is managing the shift away from cable. We will be watching for updates on Tubi, its free streaming service, and any news on the pending deal to buy Roku. These digital efforts are the key to replacing the profits lost as fewer people pay for traditional television bundles.
Roku announced it will release its quarterly results today but will skip the usual conference call and financial forecast. This is a standard move for a company that has already agreed to be bought by another firm. Fox reached a deal to acquire Roku in June as part of its plan to expand its digital reach.
For Fox, this deal is about owning the platform where people watch streaming television. By combining Roku's hardware and software with its own content like Fox News and Tubi, the company aims to control more of the advertising revenue that is moving away from traditional cable channels.
Source: Business Wire
The World Cup drove a surge of about 2.8 million new sign-ups for Fox's streaming services. While this shows the power of live sports to attract viewers, the challenge is keeping them. Many people sign up for a specific event and cancel their subscription immediately after it ends. This highlights the central tension in the business. Live sports are the most valuable content Fox owns, but they are expensive to broadcast and often lead to high churn, which is the rate at which customers stop paying for a service. The company needs to prove it can turn these temporary sports fans into long-term viewers of its other programs.
Source: Forbes
A group of Democratic lawmakers, including Senator Elizabeth Warren, raised concerns about the potential for the Roku acquisition to hurt competition. They are calling for a close look at the deal under antitrust laws, which are rules meant to prevent any one company from becoming too powerful in a single market.
This is a hurdle for the company's growth strategy. Fox wants Roku to help it compete in the digital world, but regulators may worry that owning both the content and the device used to watch it gives the company an unfair advantage. If the government tries to block the deal, it could delay or stop a key part of the company's plan to move beyond cable.
Analysts have recently adjusted their outlooks following the company's latest earnings report. Half of the 48 analysts rate the stock a buy, and the average target of $68 suggests a modest 4% gain from the current price.
Management has a perfect record of beating expectations over the last two years. They consistently set a bar they can clear, often by a wide margin.
| Expectation | |
|---|---|
| EPS | $1.44 |
| Revenue | $3.64B |
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