Why Twenty-First Century Fox (FOXA) Stock Is Up Today

NEW YORK (TheStreet) -- Twenty-First Century Fox (FOXA) was gaining 6.1% to $34.08 Thursday after beating analysts' estimates for earnings and revenue for the fiscal third quarter.

For the third quarter the media company reported earnings of 47 cents a share, beating analysts' estimates of 35 cents a share by 12 cents. Revenue grew 12% from the year-ago quarter to $8.22 billion. Analysts surveyed by FactSet expected revenue of $7.98 billion.

Broadcast TV revenue increase 27% in the quarter to $1.59 billion, largely due to the Super Bowl. Pay TV revenue grew 11% to $3.15 billion due to fees from cable companies and advertising revenue.

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TheStreet Ratings team rates TWENTY-FIRST CENTURY FOX INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate TWENTY-FIRST CENTURY FOX INC (FOXA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FOXA's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.35, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, TWENTY-FIRST CENTURY FOX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 178.54% to $727.00 million when compared to the same quarter last year. In addition, TWENTY-FIRST CENTURY FOX INC has also vastly surpassed the industry average cash flow growth rate of 3.44%.
  • You can view the full analysis from the report here: FOXA Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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