Shares in Fox Corp (FOX) were up around 7% in overnight trading after the Murdoch media conglomerate announced a surge in second-quarter profit, up more than triple the same period last year.
At US96¢ per share after adjustments, profit beat Wall Street’s expectations of US64¢ per share for the period ending in December.
A major part of its US$5.1 billion 2Q revenue report - which also beat analysts' estimates of $US4.8 billion - was due to higher political advertising spending.
During the company’s earnings call CEO Lachlan Murdoch noted that Fox experienced record political advertising revenue of US$400 million during the first half of fiscal 2025.
Fox News experienced strong ratings around the 2024 presidential election in November with around 10.3 million people tuning in to the network’s coverage of President Donald Trump’s victory over former Vice President Kamala Harris.
Also experiencing a ratings boom was the conglomerate’s sports division, with an average of 15.8 million people tuning in during the World Series in October to watch the Los Angeles Dodgers beat the New York Yankees in a five-game series, marking the championship’s highest ratings since 2017.
What also excited the market overnight were revelations about the plans to launch an upcoming streaming service before the end of the year that will package together Fox’s existing content and brands.
Murdoch expects the service to be priced “relatively low” and offer “existing content and existing brands.” The yet-to-be-named platform will provide a “holistic” offering of Fox programming, aimed at reaching viewers who do not typically pay for cable and other pay TV services.
“We are designing an offering to really target those cord-cutters and cord-nevers that are not traditionally in the cable bundle,” Murdoch said.
Plans to launch a new streaming service follow the decision to scrap a sports streaming joint-venture with Walt Disney Co and Warner Bros. Discovery (Venu) after monopoly concerns led to lengthy launch delays.
“In the end, the legal distractions around the business became increasingly difficult to bear,” Murdoch said.
Fox is expecting a strong Super Bowl which airs on 9 February with [Super Bowl] ad prices rising to a record US$8 million-plus each.
Meanwhile, Fox is facing a US$2.7 billion defamation lawsuit from Smartmatic Corp. The voting technology company alleges the conglomerate’s guests and hosts falsely claimed in 2020 that Smartmatic rigged the 2020 presidential election against Trump.
Pending court action by Smartmatic Corp follows Fox's decision to pay US$788 million in 2023 to settle a similar suit by Dominion Voting Systems Inc.
At the time of writing, shares in Fox Corp Class B (NASDAQ: FOX) were at US$51.55. Its market cap was approximately $24.02 billion.
