DHX Media (TSX:DHX)(NASDAQ:DHXM) is a Halifax-based children’s content and brands company. Shares plunged 13.25% on February 12. This drop came after the release of its fiscal 2019 second-quarter results.
The company reported a net loss of $17.9 million or $0.13 per share compared to net income of $7.4 million or $0.06 per share in the prior year.
DHX Media stated that this was primarily due to increased in non-cash, unrealized foreign exchange losses. However, total revenue also dropped to $117 million compared to $121.9 million in Q2 fiscal 2018.
Legacy media content companies like DHX Media have worked to adjust to a new environment. DHX Media did report that WildBrain grew views by 29% to more than 7 billion in the quarter. WildBrain hit its highest recorded revenue in the quarter at $19.9 million.
This shows that the company is meeting with early success in tapping into online media streaming, but it is a steep hill to climb.
DHX Media announced that it will reorganize the company into two subsidiaries. One subsidiary will focus on production studios and its television business, while the other will focus on global distribution and merchandising business, as well as its digital operations. Fiscal 2019 has emerged as a transition year for DHX Media, making it a risky buy.
As of close on February 12, DHX Media had an RSI of 35, which puts it outside of oversold territory even after its sharp drop.
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