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Madison Square (MSG) Q4 Earnings Miss, Revenues Top Estimates

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The Madison Square Garden Company MSG reported mixed fourth-quarter fiscal 2018 results. The company reported wider-than-expected loss, whereas revenues surpassed the Zacks Consensus Estimate. Madison Square incurred adjusted loss per share of $1.94, wider than the consensus estimate of loss of $1.67. In the prior-year quarter, the company had incurred loss of $3.58 per share.

Net revenues came in at $318 million, which surpassed the consensus mark of $286 million by 11.1% and grew 4.1% year over year.

Segmental Performance

Madison Square operates under two segments — MSG Sports and MSG Entertainment.

In the quarter under review, revenues from Madison Square’s Entertainment segment totaled $185.6 million, up 47% year over year. The upside was primarily driven by inclusion of operating results for TAO Group and higher overall event-related revenues at the company's venues. Growth in event revenues can be attributed to higher sales at The Garden, the Forum as well as Radio City Music Hall.

The segment’s operating loss came in at $0.4 million in the quarter compared with the operating loss of $46.1 million in the prior-year quarter. The improvement was primarily on account of robust top-line growth, partially offset by higher direct operating expenses, and selling, general and administrative expenses.

Revenues from the Sports segment declined 26% to $132.5 million. The downside can be attributed to lower league distributions and absence of playoff-related revenues. Per Madison Square, professional sports teams' regular-season ticket-related revenue as well as food, beverage and merchandise sales declined as well. However, the decrease was partially overshadowed by increase in sponsorship and signage revenues, local media rights fees and suite rental fee revenues.

The segment’s operating income declined 54% year over year to $4.5 million. The fall in operating income reflects lower revenues, partially offset by decrease in selling, general and administrative expenses as well as direct operating expenses.

Operating Income

In the reported quarter, Madison Square incurred adjusted loss was $2.5 million, narrower than the adjusted loss of $43.6 million in the year-ago quarter.

The Madison Square Garden Company Price, Consensus and EPS Surprise

The Madison Square Garden Company Price, Consensus and EPS Surprise | The Madison Square Garden Company Quote

Balance Sheet

Cash and cash equivalents totaled $1.22 billion as of Jun 30, 2018 compared with $1.23 billion on Jun 30, 2017. The company ended the quarter with long-term debt of $101.3 million compared with $105.4 million at the end of fiscal 2017.

Zacks Rank & Key Picks

Madison Square has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same space include Vail Resorts, Inc. MTN, Reading International, Inc. RDI and SeaWorld Entertainment, Inc. SEAS. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Vail Resorts reported better-than-expected earnings in the trailing two quarters.

Reading International’s earnings have surpassed the Zacks Consensus Estimate in the preceding two quarters.

SeaWorld Entertainment earnings for 2018 are likely to witness a sharp growth of 104.8%.

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