The Madison Square Garden Company MSG reported fourth-quarter fiscal 2019 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate. With this, the bottom line fell short of the Zacks Consensus Estimate after registering a beat in the trailing three quarters. Meanwhile, the top line missed the consensus mark for the second straight quarter.
In the quarter under review, the company incurred a loss of $3.08 per share, wider than the Zacks Consensus Estimate of a loss of $2.34. In the prior-year quarter, Madison Square Garden had incurred a loss of $1.94 per share. Net revenues totaled $263.6 million, which missed the consensus mark of $276 million and declined 17% year over year.
Following the quarterly results, shares of the company decreased 8.9% on Aug 20. Moreover, in the past six months, the stock has decreased 10.1% compared with the industry’s 9.4% decline.
Madison Square Garden operates under two segments — MSG Entertainment and MSG Sports.
Revenues from the Entertainment segment totaled $174 million, down 6% year over year. The downside can be mainly attributed to decrease in event-related revenues at the company's venues, soft event-related revenues for the Boston Calling festival, the impact of ASC Topic 606 on suite license fees. The winding down of Obscura Digital’s third-party business too impacted the segment’s revenues.
The segment’s adjusted operating income came in at $1.1 million, down 87% year over year. The metric decreased primarily due to a sharp decline in revenues.
Revenues from the Sports segment declined 32% to $90 million primarily due to the impact of ASC Topic 606, which hurt professional sports teams' regular-season ticket-related revenues, local media rights fees, suite license fees, league distributions and sponsorship and signage revenues.
The segment incurred an adjusted operating loss of $5.7 million due to higher direct operating expenses and soft revenues.
The Madison Square Garden Company Price, Consensus and EPS Surprise
The Madison Square Garden Company price-consensus-eps-surprise-chart | The Madison Square Garden Company Quote
In the quarter under review, Madison Square Garden incurred adjusted operating loss of $79.9 million compared with operating loss of $44.2 million in the year-ago quarter.
Cash and cash equivalents totaled $1.1 billion as of Jun 30, 2019, compared with $1.22 billion as of Jun 30, 2018. The company ended the fiscal fourth quarter with long-term debt of nearly $48.6 million compared with $101.3 million at the end of fiscal 2018.
Zacks Rank & Stocks to Consider
Madison Square Garden, which shares space with Hudson Ltd. HUD, has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks worth considering in the same space include SeaWorld Entertainment, Inc. SEAS and OneSpaWorld Holdings Limited OSW, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SeaWorld Entertainment and OneSpaWorld Holdings have an impressive long-term earnings growth rate of 7% and 20%, respectively.
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