Report
Q2 costs drive miss; impressive VMVPD growth
Despite difficult comps with last year's World Series and political advertising, revenues were ahead (+5% vs. +4% cons.) but higher than expected costs drove an EBITDA miss (-28% vs. -23% cons). EPS of $0.42 was ahead on tax. The most significant stand out was the 12% increase in domestic affiliate fees, fuelled by higher priced carriage on VMVPDs. Fox now sees nearly 4m VMVPD subs in the US vs. nearly 3m last quarter, up ~33% QoQ. All in, we now estimate total US pay TV sub declines may be improving, from -1.5% YoY in Q3 to -1.4% in Q4. This is a major positive for networks actually carried by VMVPDs (such as Fox News and the Fox Broadcast Network). Fox subs were actually flat YoY (helped by growth at under-penetrated nets).
Underlying
21st Century Fox
Provider
Atlantic Equities
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
Hamilton Faber
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