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

The financial data reveals several notable trends in profitability and capital efficiency over the six-year period examined.

Net Operating Profit After Taxes (NOPAT)

NOPAT exhibits substantial fluctuations throughout the analyzed years. It initially decreases sharply from 7,896 million in mid-2013 to 4,517 million in mid-2014, before rebounding strongly to 9,417 million in mid-2015. Subsequently, it declines again in 2016 to 4,025 million, followed by slight increases in the two successive years, reaching 4,669 million by mid-2018. Overall, NOPAT does not show a stable upward or downward trend but rather a volatile performance with peaks and troughs.

Cost of Capital

The cost of capital decreases progressively from 14.01% in 2013 to a low of 12.54% in 2016, indicating potentially improved financing costs or reduced risk perception during those years. However, from 2016 onward, it rises again to 14.17% by mid-2018, surpassing the initial level. This upward movement in the latter years could indicate increasing capital costs or higher perceived risk.

Invested Capital

Invested capital shows some variation but remains within a relatively narrow range. It increases from 44,434 million in 2013 to a peak of 48,265 million in 2014, declines to a low of 42,462 million in 2016, and then rises again, reaching 47,272 million by 2018. This pattern suggests adjustments in investment levels, potentially reflecting asset acquisitions, disposals, or changes in working capital.

Economic Profit

Economic profit demonstrates considerable volatility and overall negative performance in most years. It starts positively at 1,672 million in 2013, turns negative at -2,126 million in 2014, recovers strongly in 2015 to 3,481 million, and then remains negative through 2016 to 2018, declining further to -2,029 million in 2018. The recurring negative economic profit in four out of six years indicates that the company often did not generate returns exceeding its cost of capital, suggesting value destruction during those periods.

In summary, the company experienced significant fluctuations in operational profitability and economic value creation, with no sustained period of positive economic profit. The decline and subsequent rise in the cost of capital likely influenced these outcomes. Invested capital levels were moderately variable, potentially tied to strategic and operational adjustments. These patterns highlight challenges in maintaining consistent profitability above capital costs over the analyzed timeframe.

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.

Economic Profit

The economic profit demonstrated considerable volatility over the six-year period. Starting positively at 1672 million US dollars in 2013, it shifted to a negative value of -2126 million in 2014. A significant recovery occurred in 2015 with a peak of 3481 million; however, from 2016 onwards, the economic profit remained negative, trending downward to -1299 million in 2016, -1448 million in 2017, and further declining to -2029 million in 2018. This pattern indicates fluctuating profitability with recent years showing consistent economic losses.

Invested Capital

Invested capital followed a relatively stable but slightly increasing trajectory over the period. The value rose from 44434 million US dollars in 2013 to 48265 million in 2014, then decreased to 44315 million in 2015. Thereafter, it declined modestly to 42462 million in 2016 before increasing again, reaching 45055 million in 2017 and further growing to 47272 million by 2018. Overall, the invested capital did not show dramatic swings, suggesting steady investment levels with minor adjustments year-to-year.

Economic Spread Ratio

The economic spread ratio reflected fluctuations that mirrored the economic profit trend. Initially positive at 3.76% in 2013, it turned negative the following year at -4.4%. A notable recovery to 7.86% occurred in 2015, representing the highest spread during the observed timeframe. Subsequently, it reverted to negative values ranging between -3.06% and -4.29% from 2016 through 2018. This volatility indicates challenges in generating returns above the capital cost, especially in the latter years.

Economic Profit

The economic profit exhibits significant volatility over the observed periods. It starts positively at 1,672 million US dollars in mid-2013, dips sharply to a negative 2,126 million in mid-2014, rebounds to a peak of 3,481 million in mid-2015, and then declines into negative territory again for the subsequent years, reaching -2,029 million by mid-2018. This pattern indicates fluctuating profitability and underscores challenges in maintaining consistent economic gains.

Adjusted Revenues

Adjusted revenues show moderate fluctuations with an overall upward trend. Beginning at 27,472 million US dollars in mid-2013, revenues increase to 31,880 million in mid-2014, followed by a decrease to 27,745 million in mid-2015 and a further dip to 27,383 million in mid-2016. From then, revenues rebound, rising to 28,575 million and 30,498 million in mid-2017 and mid-2018, respectively. These changes indicate some instability in revenue generation but suggest recovery in the later years.

Economic Profit Margin

The economic profit margin reflects a similar volatile trend as economic profit. The margin stood at a positive 6.09% in mid-2013, turned negative at -6.67% in mid-2014, then rose sharply to 12.11% in mid-2015. Subsequently, it remained negative over the last three periods, fluctuating between -4.74% and -6.65%. This reveals difficulties in maintaining profit efficiency relative to revenue over time.

Summary

Overall, the data reveals a pattern of pronounced fluctuations in economic profitability, contrasting with somewhat more stable revenue figures showing moderate growth in recent years. Despite increasing revenues towards the end of the period, the persistent negative economic profit and margin indicate challenges in translating revenue growth into sustained profitable economic performance. The volatility in economic profit and its margin suggests sensitivity to underlying cost structures, market dynamics, or other operational factors affecting profitability.