Fox Corp (NASDAQ:FOXA) is expected to report stronger fiscal fourth quarter results, supported by robust World Cup viewership, improving news ratings and continued momentum at streaming platform Tubi, according to UBS analysts.
The firm raised its earnings estimates ahead of Fox's upcoming report, forecasting fiscal fourth-quarter EBITDA of approximately $1.02 billion, up 9% from a year earlier and above its previous estimate of $1 billion and the Visible Alpha consensus estimate of $975 million.
UBS analysts wrote that soccer programming is helping drive advertising demand and subscriptions for FOX One, with total company advertising revenue projected to increase 31% year over year in the quarter. Excluding World Cup-related revenue, Tubi and other items, UBS expects advertising revenue to decline about 1%.
The firm now estimates Fox will generate roughly $500 million in World Cup advertising revenue across the fiscal fourth quarter and fiscal first quarter, compared with a prior estimate of $350 million, citing ratings trends that have outperformed the last tournament.
Distribution revenue is expected to rise 3.1% in the quarter, compared with growth of 3.3% in the prior quarter.
UBS wrote that stronger-than-expected World Cup performance could help Fox deliver a record annual EBITDA total of about $3.7 billion despite fiscal 2026 being a non-election year. The brokerage also sees additional cyclical tailwinds in fiscal 2027 from the latter stages of the World Cup and U.S. midterm elections, while investments in FOX One moderate.
Within Fox's cable segment, UBS expects distribution revenue growth of 5.1%, aided by continued uptake of FOX One. The analysts noted that FOX One downloads in June were running more than 15 times higher than in May.
Cable advertising revenue is projected to grow 16% in the quarter, supported by improving ratings comparisons at Fox News and sustained pricing strength. UBS expects cable segment EBITDA to slip about 1% year over year to $736 million, as World Cup programming weighs on profitability.
For the television segment, UBS forecasts advertising revenue growth of 39%, or about 7% excluding World Cup-related sales. Tubi revenue is expected to rise 20% from a year earlier as viewership continues to increase, while linear television advertising is anticipated to decline about 4% after adjusting for the World Cup, political advertising and other factors.
Television segment EBITDA is projected to reach $422 million, up from $308 million a year ago, with UBS expecting the World Cup to contribute positively to profitability in the segment.
UBS maintained a positive view on Fox shares, pointing to expected earnings growth and opportunities from its recently announced Roku transaction. The analysts also discussed the possibility of an early renewal of Fox's NFL rights package, estimating that a 50% to 60% increase in annual rights fees could create an approximately $1 billion EBITDA headwind.
However, UBS wrote that such a scenario is not part of its base-case outlook and could be partly offset through higher retransmission fees and adjustments to other sports programming commitments.