DHX Media Ltd. :DHXM-US: Earnings Analysis: Q1, 2017 By the Numbers : November 28, 2016

DHX Media Ltd. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of DHX Media Ltd. – ProSiebenSat.1 Media SE Unsponsored ADR, PT Media Nusantara Citra Tbk Unsponsored ADR and RTL Group S.A. Unsponsored ADR (PBSFY-US, PTMEY-US and RGLXY-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 41.27 million, Net Earnings of USD 1.05 million.
  • Gross margins narrowed from 50.77% to 44.69% compared to the same period last year, operating (EBITDA) margins now 24.19% from 27.61%.
  • Year-on-year change in operating cash flow of 58.96% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 41.27 58.44 61.21 61.02 48.85
Revenue Growth (%YOY) -15.51 0.97 -11.24 7.85 23.55
Earnings (mil) 1.05 -1.35 7.44 8.74 5.75
Earnings Growth (%YOY) -81.71 -145.06 -48.8 79.2 180.94
Net Margin (%) 2.55 -2.32 12.15 14.32 11.77
EPS 0.01 -0.01 0.06 0.07 0.05
Return on Equity (%) 1.63 -2.28 14.33 17.6 11.29
Return on Assets (%) 0.61 -0.77 4.37 5.5 3.59

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Market Share Versus Profits

Revenues History
Earnings History

DHXM-US‘s change in revenue this period compared to the same period last year of -15.51% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that DHXM-US is holding onto its market share. Also, for comparison purposes, revenues changed by -29.37% and earnings by 177.66% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 50.77% to 44.69%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 27.61% to 24.19% in this time frame. For comparison, gross margins were 54.46% and EBITDA margins were 29.20% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

DHXM-US‘s change in operating cash flow of 58.96% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 22.58% to 10.96% and (2) one-time items that contributed to a decrease in pretax margins from 13.91% to 3.71%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for DHX Media Ltd.

Company Profile

DHX Media Ltd. is engages in the business of producing, distributing, broadcasting and exploiting the rights for television and film programming primarily focusing on children’s, youth and family productions. The company is internationally in the creation of content for families and children, is recognized globally for such brands as Yo Gabba Gabba!, Caillou, Teletubbies, It is a global children’s entertainment company. DHX Media was founded by Charles William Bishop and Michael Patrick Donovan on February 12, 2004 and is headquartered in Halifax, Canada.

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