Fox Corp. (FOXA) just had a very good quarter. Revenue rose 22% to $4.57 billion. Ad revenue jumped 47%. Two things did most of the work. The FIFA World Cup aired on Fox this summer. And a midterm election filled its airtime with political ads. Both happen on a calendar. Neither one is a trend.
The Journal's Kelly Cloonan and Joe Flint have the numbers from Monday, Nov. 2. Profit came in at $957 million, or $2.20 a share. A year earlier it was $609 million, or $1.32. Adjusted earnings were $2.54 a share. Analysts had expected $2.08. Fox credited the World Cup and its Tubi streaming service for part of the ad gain. It also booked a record $350 million in political ads across its networks this midterm cycle. Some of that lands in the current quarter.
The money was everywhere this fall
Fox wasn't alone. The Journal's Neil Mehta reports that advertisers spent a record $4 billion on political ads in October. That's the count from AdImpact, an ad-tracking firm. Republicans spent $1.9 billion. Democrats spent $1.8 billion. Independent groups made up the rest. AdImpact calls it the most expensive midterm cycle ever. Fox's record $350 million came from that same cycle.
Here's the other side of the story. Prime-time viewing at Fox News fell 28% in October from a year earlier, by Nielsen's count. The drop was sharper among viewers aged 25 to 54. It's still the most-watched cable news network. CEO Lachlan Murdoch called it "viewer fatigue" and a tough comparison with last fall's big news events. He said the same thing happened in the 2006 midterms. The stock slipped 0.4% on Monday. One note. Fox Corp. and the Journal's parent, News Corp, share common ownership. The Journal says so in its story, and so do we.
Our read
Investments/Risk · IN04. A record quarter from a tournament and an election is real money. It just isn't repeatable money. The World Cup comes every four years. Midterms come every two. Next year's results will be compared with this quarter, and that's a hard act to follow. When a company beats on a one-time event, read what it says about next year, not the headline beat. Fox isn't held in any of our model books.
Here's the check for your plan. Pull up the last report of the biggest single stock you own, maybe your employer's. Find the line that says what drove the growth. If it was an event, a deal or a one-time sale, don't pencil that growth into next year. If that stock is a big part of what you own, bring the report to your next review. The same goes for your own paycheck. A bonus is a World Cup, not a raise. Spend it like one-time money and send the rest to savings. Nobody buys a bigger umbrella because of one storm.