NEW YORK - Madison Square (NYSE:SQ) Garden Sports Corp. (NYSE: MSGS) reported a significant earnings miss for its fiscal third quarter, despite posting higher revenues.
The company, which owns the New York Knicks and New York Rangers, announced an adjusted earnings per share (EPS) of $1.57, falling short of the analyst consensus estimate of $2.60 by $1.03. Revenue for the quarter was $430 million, exceeding the consensus estimate of $420.8 million by approximately 2.2% and marking a 12% increase from the same quarter last year.
The company's stock fell by 3.2% following the announcement, indicating investor disappointment over the earnings shortfall.
Madison Square Garden Sports Corp. Executive Chairman James L. Dolan commented on the results, "Our third quarter results reflect solid operating performance across our business, driven by ongoing enthusiasm for the Knicks and Rangers, as both teams concluded successful regular seasons and qualified for the playoffs." He expressed confidence in the company's position to generate long-term value for shareholders.
The fiscal 2024 third quarter saw a 12% rise in revenues, attributed to higher ticket-related revenues, suite revenues, and sales of food, beverage, and merchandise. The Knicks played five more home games compared to the prior year, contributing to the revenue increase. However, operating income decreased by 2%, and adjusted operating income saw a modest increase of 3%.
The company's financial performance was also influenced by a 14% rise in direct operating expenses, primarily due to increased team personnel compensation and higher provisions for league revenue sharing and NBA luxury tax. Selling, general, and administrative expenses also surged by 25%, largely due to higher employee compensation and related benefits.
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