Sports wasn’t enough to help Fox Corp. get to its goals.
The owner of Fox News Channel and the Fox broadcast network said profit fell in its first fiscal quarter as robust results generated by its showing of the FIFA Women’s World Cup were offset by declines in its cable operations, where subscribers and advertising revenue fell.
In all, Fox Corp. reported net income of $407 million, or 82 cents per share, compared with $605 million. Earnings, adjusted for non-recurring costs, were $1.10 per share.
In a statement, Fox Corp. CEO Lachlan Murdoch cited the company’s sports portfolio and activity at Tubi, its ad-supported streaming hub, as bright spots during the period.
To be sure, Fox’s first-quarter revenue rose to$3.21 billion, compared with $3.19 billion in the year-earlier period. But the company said ad revenues for the period were off 2% due to lower political advertising at its local TV stations and the pressures of a higher-supply of direct-response advertising at its Fox News properties. Direct-response advertisers typically pay lower prices in exchange for their commercials being placed as needed by the network. Advertisers in recent quarters have been wary of aligning their commercials with news programming, citing concerns about the consumer polarization, and Fox News has made efforts to broaden its programming beyond coverage of politics.
“We think Fox News is currently navigating through both a weak DR market and some viewership challenges as it works to re-program the primetime line-up,” said Wells Fargo analyst Steven Cahall in a Thursday research note.
Revenue from distribution rose 2%.
Fox grappled with declines in business at its cable assets, noting that revenue fell to $1.39 billion, compared to $1.43 billion in the year-earlier period. Affiliate fees fell to $1.01 billion from $1.03 billion, due to subscriber declines. Advertising revenue fell to $290 million, compared with $316 million in the year-earlier period, due to lower ratings and a higher use of direct-response ads.
Meanwhile, revenue at the company’s linear TV operations were better. Those businesses generated revenue of f $1.78 billion, an increase of $66 million or 4% from the year-earlier period. Advertising revenues increased $5 million or 1%, due to the Women’s World Cup and increased activity at Tubi.
Affiliate fees rose$53 million or 8%.
In a call with investors Thursday, Murdoch suggested future results would be more robust due to a holiday slate of sports offerings and the effects of the looming 2024 presidential election on both Fox News and the company’s local stations.