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Madison Square (MSG) Misses Q1 Earnings on Higher Costs - Analyst Blog

The Madison Square Garden Company ( MSG ) posted mixed fiscal first-quarter 2015 results. Adjusted earnings of 24 cents per share missed the Zacks Consensus Estimate of 32 cents by 25%, possibly due to higher costs and expenses. Adjusted earnings excluded the gain from the sale of the Fuse Network.

The Madison Square Garden Company - Earnings Surprise | FindTheBest

Further, earnings dropped 23% year over year, mainly due to the Fuse Network sale, completed on Jul 1, 2014.

Revenue Details

Net revenue of $241.7 million beat the Zacks Consensus Estimate of $219 million by 10.4% and increased 12% year over year. Revenues benefited primarily due to an increase in revenues in the MSG Entertainment and MSG Sports segments, partially offset by decline in the MSG Media revenues.

The company is engaged in sports, entertainment, and media businesses and operates mainly under three segments: MSG Media, MSG Entertainment and MSG Sports.

The MSG Entertainment segment generated revenues of $65.2 million, up substantially year over year. Revenues benefitted from the positive impact of the Madison Square Garden Arena, the Forum and The Theater at Madison Square Garden being open during the quarter, which was closed in the prior-year quarter.

Revenues from the MSG Sports segment were $53.3 million, up 40% year over year driven by the Madison Square Garden Arena being open.

Revenues at the MSG Media segment declined 14% year over year to $57.1 million. The decline reflects the absence of revenues from the Fuse network.

Behind the Headline Numbers

Operating income increased substantially from the prior-year quarter to $197.4 million, mainly due to higher revenues. However, selling, general and administrative expenses increased 3.4% year over year, due to higher expenses in both the MSG Entertainment and MSG Sports segments, partly offset by a decline in the MSG Media segment.

Financial Update

As of Sep 30, 2014, cash and cash equivalents were $320.8 million, up from $92.3 million as of Jun 30, 2014. As of Sep 30, 2014, total liabilities and stockholders' equity was $3.1 billion, up from $2.9 billion in the prior quarter.

Other Events

In October this year, the board of directors at Madison Square Garden unanimously approved a possible spin-off of its entertainment businesses from its media and sports unit. The spinoff would create two publicly traded companies. (Read More: Madison Square to Consider Spinoff Plan, Shares Up 11% ).

Madison Square Garden presently has a Zacks Rank #2 (Buy). Other worth considering stocks in the same sector include Diamond Resorts International, Inc. ( DRII ), Vail Resorts Inc. ( MTN ) and Norwegian Cruise Line Holdings Ltd. ( NCLH ). While Diamond Resorts and Vail Resorts sport a Zacks Rank #1 (Strong Buy), Norwegian Cruise Line has a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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