Fox swings to a loss after its Dominion settlement
New York CNN —
Fox Corp. posted a loss in the most recent quarter after it paid a $787.5 million settlement to Dominion Voting Systems.
The company had posted a profit in the same quarter a year ago.
The company took a $719 million charge including the cost of settlements, which was partly offset by equity earnings of it affiliates and a change in the market value of some of its investments. But the hit left Fox with a $50 million net loss, compared to $290 million in profit a year earlier.
The earnings statement didn’t mention Dominion Voting Systems, although it does refer to charges related to legal settlement costs at Fox News Media. On the company’s call with investors Tuesday Fox CEO Lachlan Murdoch referred to the settlement with Dominion as in the best interest of the company and its shareholders, given rulings by the Delaware court that he said limited its defense. He said going to trial could have led to two to three years of appeals.
“We’re proud of our Fox News team, the exceptional quality of their journalism and their stewardship of the Fox News brand,” he said. “So as we look ahead, we are confident in the strength of the Fox brands and the strength of our balance sheet.”
Excluding those special items it had adjusted earnings of $494 million, or 94 cents a share, up from $459 million a year earlier. That was better than the 87 cents a share forecast by analysts surveyed by Refinitiv. The company was helped by the profits and revenue gain it received from airing this year’s Super Bowl.
Since its settlement with Dominion, Fox has fired its most popular anchor, Tucker Carlson. Ratings on Fox News have fallen, while other right wing networks have gained audience since Carlson’s firing.
And Fox still faces a lawsuit from another voting machine manufacturer, Smartmatic, which is seeking $2.7 billion in damages. Murdoch told investors that case is “fundamentally different” from the Dominion case and that Fox will have greater defenses available to it than in the Delaware court hearing the Dominion case.
The Dominion settlement was reached on April 18. Dominion accused Fox of reporting false statements about Dominon’s voting machines in the 2020 presidential election.
Fox had plenty of money available to pay the settlement. It said it had $4.1 billion in cash and cash equivalent on hand as of March 30, about three weeks before the settlement was reached. It also announced it repurchased $1.8 billion of its shares in the nine months ending March 31, as part of a $7 billion share repurchase plan. So far, Fox has repurchased $4.4 billion worth of shares as part of its plan.
The hit from the settlement was well known by investors ahead of the report. The better than expected earnings helped lift shares of Fox (FOX) rose in premarket trading following the report.
Source: CNN
