A month has gone by since the last earnings report for Fox (FOXA). Shares have added about 3.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fox due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

FOXA Q2 Earnings Surpass Expectations, Revenues Increase Y/Y

Fox Corporation reported second-quarter fiscal 2025 adjusted earnings per share of 96 cents, which beat the Zacks Consensus Estimate by 47.69%. The figure increased 182.4% year over year.

Revenues increased 20% year over year to $5.08 billion, beating the consensus mark by 3.9%.

Affiliate fees (37.4% of total revenues) rose 6.3% to $1.9 billion, driven by 9% growth in the Television segment and 4.4% growth in the Cable Network Programming segment.

Advertising revenues (47.7% of total revenues) increased 21% year over year to $2.42 billion, primarily due to higher political advertising revenues, the impact of higher MLB postseason ratings and NFL pricing, continued digital growth led by the Tubi AVOD service, and stronger news ratings and pricing. 

Other revenues (14.9% of total revenues) surged 69.9% year over year to $756 million.

Top-Line Details

Cable Network Programming revenues (42.6% of total revenues) increased 30.6% year over year to $2.16 billion. Advertising revenues grew 32.2%, whereas revenues from Affiliate fees rose 4.4% year over year. Other revenues increased 125.4% on a year-over-year basis, primarily due to higher sports sublicensing revenues.

Television revenues (58.3% of total revenues) rose 16.5% from the year-ago quarter’s figure to $2.96 billion. Advertising revenues jumped 18.6% year over year. Affiliate fees grew 9% year over year, led by higher rates at both the company's owned and operated stations, as well as third-party FOX affiliates. Other revenues increased 32.6% year over year, primarily due to higher content revenues.

Operating Details

In the second quarter of fiscal 2025, operating expenses increased 11.3% year over year to $3.77 billion. As a percentage of revenues, operating expenses contracted 580 basis points (bps) to 74.4%. The increase in expenses was primarily due to higher sports programming rights amortization and production costs, and higher digital costs.

Selling, general & administrative (SG&A) expenses increased 6.1% year over year to $525 million. As a percentage of revenues, SG&A expenses contracted 140 bps to 10.3%.

Total adjusted EBITDA surged 123.1% year over year to $781 million. Adjusted EBITDA margin expanded 710 bps to 15.4%.

Cable Network Programming EBITDA rose 16.5% year over year to $657 million. Television reported an adjusted EBITDA of $205 million against a negative adjusted EBITDA of $138 million reported in the year-ago quarter.

Balance Sheet

As of Dec. 31, 2024, Fox had $3.32 billion in cash and cash equivalents compared with $4.05 billion as of Sept. 30, 2024. Long-term debt, as of Dec. 31, 2024, was $6.6 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Fox has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Fox has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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