Fox Corp. Reels in $600 Million in Super Bowl Sunday Revenue

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Fox Corp. executive chairman and CEO Lachlan Murdoch

Quarterly revenue rose 5 percent to $3.78 billion compared to a year-earlier $3.58 billion.

Fox Corp., led by CEO and executive chairman Lachlan Murdoch, on Wednesday reported sharply higher second-quarter earnings on valuation changes and higher advertising revenue.

Fox — which, after Rupert Murdoch agreed to sell most of 21st Century Fox to Walt Disney for $71 billion, became a stand-alone company mostly focused on news and sports — reported net income of $314 million for the latest quarter, or 48 cents per share, compared with $24 million in the year-ago period, or 1 cents a share.

Fox. Corp. blew past a Wall Street forecast for a per-share loss of 4 cents for the latest period. Quarterly revenue rose 5 percent to $3.78 billion, compared to a year-earlier $3.58 billion.

Fox said its quarterly income line for the latest quarter was boosted by changes in the fair values of its investments in Roku, in which Fox holds a 5 percent stake, and The Stars Group, which were offset by higher operating costs and expenses after the Disney sale. According to data from the online video analytics firm Conviva, Roku now accounts for 23 percent of all time spent streaming, including a 43 percent share of connected TV viewing time.

Fox also reported advertising revenue of $2.01 billion, up from a year-earlier $1.98 billion. Lachlan Murdoch during an analyst call cited big ad revenue returns from airing and streaming the recent Super Bowl, popular programming from Fox News and shows like The Masked Singer and Prodigal Son on the Fox broadcast network. Fox brought in $600 million in gross revenue on Super Bowl Sunday.

"Our advertising market, local and national, is buoyant," Murdoch told analysts. Fox is also expecting a big ad revenue bump from covering the upcoming U.S. presidential election campaigns, both for Fox News and its local TV stations. The exec predicted a new record for political ad revenue at Fox in 2020.

Murdoch added that the Fox broadcast network had already received ad buys from both the Republican and Democratic parties. And President Donald Trump's re-election campaign had yet to purchase significant ad space on local TV stations, while presidential candidate Michael Bloomberg had begun to buy commercial airtime on a week-to-week basis.

"Although we are very early in the political season, we are already seeing signs of further increased political spending, with the vast majority of the spend dedicated to the unmatched reach of television," Murdoch said of political ad buying shaping up for 2020.

The exec also talked on the call about a carriage dispute last week that preceded a new deal between Fox and Roku, which allowed the Super Bowl to play on the streaming platform. "We went through a normal course of negotiations with them, not unlike we have with all our distributors. ... We were able to resolve our differences and conclude a new agreement," he told analysts.

Murdoch also praised Roku, led by CEO Anthony Wood: "They've positioned the company to be one of the leading, or lead beneficiary, of over-the-top streaming. We are happy shareholders in the company."

MoffettNathanson analyst Michael Nathanson in his earnings preview noted positive momentum at the Fox network. "Among broadcast networks, Fox was the lone bright spot with 6 percent growth in the quarter," he wrote.

Barclays analyst Kannan Venkateshwar noted that "Fox (and CBS) are likely to have some tailwinds from NFL ratings, but cable networks are likely to remain weak." He also added, "While Fox News ratings have been strong, the impeachment-driven news cycle has likely resulted in more than usual pre-emption, which likely capped benefits."