Twenty-First Century Fox Inc. (NASDAQ:FOX)

The analysis of the financial data reveals fluctuating operational and economic performance over the presented periods. Net operating profit after taxes (NOPAT) exhibits significant variability, with a notable peak in 2015, reaching 9,417 million US dollars, which stands out as the highest value in the series. However, this peak is followed by a decline in subsequent years, stabilizing at comparatively lower levels around 4,273 to 4,669 million US dollars in the later periods.

The cost of capital experienced a gradual decrease from 2013 through 2016, dropping from 14.22% to 12.72%, suggesting a potential reduction in the company’s financing costs or perceived risk during that timeframe. Nevertheless, from 2017 onwards, there is an observable increase in the cost of capital, culminating at 14.38% in 2018, indicating a possible shift in the capital market conditions or company-specific risk factors.

Invested capital demonstrates moderate fluctuations, increasing from 44,434 million US dollars in 2013 to a peak of 48,265 million US dollars in 2014, followed by a decline in 2015 and 2016. A rising trend resumes afterward, with values reaching 47,272 million dollars by 2018. This pattern may reflect capital allocation changes or asset base adjustments over time.

Economic profit, reflecting value creation beyond the cost of capital, displays considerable volatility. It is positive in 2013 and 2015, indicating value creation during these years, with a peak of 3,393 million US dollars in 2015. However, it turns negative in other years, showing economic losses that increase in magnitude towards the end of the period, reaching -2,131 million US dollars in 2018. The trend suggests challenges in consistently generating returns exceeding the cost of capital, especially in recent years.

Summary of Key Trends

- Net operating profit after taxes peaks sharply in 2015 but declines and stabilizes at lower levels thereafter.

- Cost of capital shows an initial downward trend, followed by an increase in the final years.

- Invested capital fluctuates moderately, with a general increasing trend from 2016 onwards.

- Economic profit is volatile, with value creation in only some years and sustained economic losses in others, worsening notably by 2018.

Overall, the data indicates a period of instability in operational efficiency and economic value generation, with significant challenges in maintaining profitability above the cost of capital in the latter years. The increasing cost of capital coupled with inconsistent economic profits suggests a need for strategic financial or operational adjustments to enhance shareholder value.

Net Income Attributable to Stockholders

The net income showed notable fluctuations over the analyzed periods. It started at 7,097 million USD in 2013, then declined significantly to 4,514 million USD in 2014. In 2015, there was a strong rebound with net income increasing to 8,306 million USD, marking the highest value in the timeframe. Afterward, net income dropped sharply to 2,755 million USD in 2016 and remained relatively low in 2017, with a slight increase to 2,952 million USD. In 2018, net income rose again to 4,464 million USD, indicating partial recovery but still below the earlier peak.

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated a pattern similar to net income but with somewhat less pronounced variation. Starting at 7,896 million USD in 2013, it decreased substantially to 4,517 million USD in 2014. NOPAT peaked at 9,417 million USD in 2015, exceeding the initial period's value. Following this peak, it declined sharply to 4,025 million USD in 2016. The next two years showed moderate growth, with NOPAT increasing to 4,273 million USD in 2017 and 4,669 million USD in 2018.

Overall Trend Analysis

Both net income and NOPAT experienced significant volatility throughout the six years. The years 2014 and 2016 are characterized by marked downturns in profitability metrics. The year 2015 stands out as a peak period for both measures, reflecting a temporary strong financial performance. After 2016, there is evidence of gradual operational improvement through 2018, though neither net income nor NOPAT returned to their earlier peak levels by the end of the period. The data suggests a cycle of recovery following considerable profit contractions, warranting further examination of underlying causes during downturn years.

Provision for income taxes from continuing operations

The provision for income taxes generally declined from 2013 to 2016, starting at 1,690 million US dollars in 2013 and decreasing steadily to 1,130 million in 2016. In 2017, there was a notable increase to 1,419 million, followed by a significant drop to a negative figure of -364 million in 2018, which may indicate a tax benefit or a reversal of previous tax provisions.

Cash operating taxes

Cash operating taxes fluctuated over the period. Beginning at 1,612 million US dollars in 2013, the figure increased to 1,707 million in 2014, then decreased to 1,504 million in 2015. A more marked decline occurred in 2016 with taxes dropping to 1,095 million. Subsequently, there was a sharp rise to 1,781 million in 2017 before falling significantly to 904 million in 2018. The fluctuations suggest variability in cash tax payments potentially linked to changing profitability or tax planning strategies.

Total reported debt & leases

The total reported debt and leases displayed fluctuations over the six-year period. Starting at $19,912 million in 2013, the debt increased to a peak of $22,748 million in 2014. Following this peak, there was a general decline in debt, descending to $20,609 million in 2015 and remaining relatively stable through 2016 and 2017, with slight increases and decreases respectively. By 2018, the debt had further decreased to $21,076 million. Overall, the debt levels demonstrate initial growth followed by a slight reduction and stabilization trend.

Total Twenty-First Century Fox, Inc. stockholders’ equity

Stockholders' equity showed an overall increasing trend despite some variability. Beginning at $16,998 million in 2013, there was a moderate increase to $17,418 million in 2014, followed by a small decrease to $17,220 million in 2015. A notable decline occurred in 2016, when equity dropped sharply to $13,661 million. After this decline, equity rebounded, increasing to $15,722 million in 2017 and further to $19,564 million in 2018, marking the highest equity value in the period.

Invested capital

Invested capital demonstrated a fluctuating but generally downward trend in the earlier years, followed by recovery in later years. It began at $44,434 million in 2013, increased to $48,265 million in 2014, then decreased significantly to $44,315 million in 2015 and further declined to $42,462 million in 2016. From 2016 onwards, invested capital increased, reaching $45,055 million in 2017 and $47,272 million in 2018, though it did not quite return to the previous peak observed in 2014.

The financial analysis indicates significant fluctuations in economic profit over the examined period. Initially, economic profit was positive in 2013, then experienced a steep decline to negative values in 2014. This loss was followed by a recovery in 2015, with economic profit reaching a peak. However, from 2016 onwards, a consistent negative trend in economic profit is observed, with increasing losses through 2018.

The invested capital shows a fluctuating but generally increasing trend over the period. It rose from 44,434 million US dollars in 2013 to a peak of 48,265 million US dollars in 2014, followed by a slight decline through 2016, then an upward trend again reaching 47,272 million US dollars by 2018.

The economic spread ratio mirrors the variability seen in economic profit. In 2013, the ratio was positive, indicating returns exceeding the cost of capital. This was followed by a negative spread in 2014, a recovery to a high positive spread in 2015, and then consistently negative spreads from 2016 to 2018, implying that the company’s returns were below its cost of capital during these years.

Economic Profit

Displayed volatility with alternating positive and negative values, peaking in 2015 and declining thereafter.

Invested Capital

Generally increased across the period, with minor declines mid-period but an overall upward trajectory.

Economic Spread Ratio

Reflected the economic profit trend, fluctuating between positive and negative, ending the period with consistent negative spreads.

In summary, the company experienced a challenging period post-2015, where economic profitability deteriorated despite an increasing invested capital base. The persistently negative economic spread ratio from 2016 onwards suggests underperformance relative to the cost of capital, signaling a need for strategic review and potential operational improvements.

The financial data demonstrates variability and volatility in key performance indicators over the analyzed periods. The economic profit figures show notable fluctuations, oscillating between positive and negative values, indicating inconsistent profitability outcomes year over year. Specifically, economic profit peaked in the year ending June 30, 2015, with a significant positive value, while the years 2014, 2016, 2017, and 2018 experienced negative economic profit, suggesting challenges in generating value above the cost of capital during those periods.

Adjusted revenues exhibit a more stable yet moderately variable trend. Starting at a base of approximately 27.5 billion US dollars, revenues increased to nearly 31.9 billion US dollars in 2014, followed by a decline in the subsequent years, before gradually recovering to approximately 30.5 billion US dollars by 2018. This fluctuation in revenues may reflect changing market conditions, strategic adjustments, or shifts in demand across the company’s offerings.

The economic profit margin confirms the trends observed in economic profit, shifting from positive margins in 2013 and 2015 to negative margins in other years. The margin peaked at 11.8% in 2015, coinciding with the highest economic profit, but declined sharply in most other years to levels between -5.03% and -6.99%. Negative margins indicate that for multiple years, the company did not generate sufficient returns over its capital costs, which could signal operational inefficiencies or increased capital expenses.

Economic Profit

Marked by high volatility with swings between positive and negative values, notably strong in 2015, but negative in most other years.

Adjusted Revenues

General upward trend with some fluctuations, peaking in 2014 followed by a decline and partial recovery towards 2018.

Economic Profit Margin

Reflects profitability trends with significant fluctuation, positive only in 2013 and 2015 and negative during the other periods, indicating challenges in value creation.

Overall, the financial performance underscores periods of strong results interspersed with years of diminished profitability, suggesting a need for further analysis into the drivers behind these fluctuations and potentially measures to stabilize earnings and improve capital efficiency.