Strong Fiscal Year Start for Fox

Quarterly revenue was up 2% versus a year ago to $7.2 billion as growth in the cable and TV segments overcame the decline at the film studio. The cable segment was up 4%, driven by 9% domestic affiliate fee growth, as Fox continues to drive fee growth at its core brands while expanding the subscriber base of its newer channels. Domestic advertising revenue improved by 7% due to higher pricing at Fox News as the firm likely took advantage of the highly charged midterm elections. International cable revenue fell 4% as the adverse effect of a strong dollar more than offset the continued growth in affiliate fees and ad revenue. EBITDA margin for the cable segment fell by 65 basis points to 35.4% as the revenue growth was more than offset by increased sports rights costs with the impact of a strong dollar on the international side.

Revenue for the studio business was down 7% as growth in SVOD revenue from the TV side was more than offset by a smaller theatrical slate. EBITDA margin for the studio segment increased by 160 basis points to 14.6% due to larger contribution from the higher margin SVOD revenue. The 20% year-over-year growth in broadcast television revenue was largely due to 19% growth in retrans revenue and 22% increase in ad revenue, driven by the World Cup and more NFL games in the quarter. As a result, overall EBITDA increased to 5% to $1,873 million and EBITDA margin improved by 50 basis points to 26.1%.

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