By Nathan Becker and Keach Hagey 

Cable networks powered revenue and adjusted profit growth for 21st Century Fox Inc. in the March quarter, as increases in subscription fees and ad dollars offset higher programming expenses.

The company's cable network division continued to log solid revenue growth, rising 9.8% to $3.94 billion in the latest quarter.

Carriage payments from pay-TV providers increased 7% while higher ratings at Fox News and professional basketball coverage by Fox's regional sports channels helped drive up ad sales 17%.

At the broadcast TV unit, revenue was up 5% due to higher carriage fees and political advertising.

The film-studio segment, which has been a weak spot for Fox the past few quarters, showed some improvement as revenue fell 2.8% -- a sharp moderation from the 14% decline in film studio revenue the company had posted in the December quarter. Adjusted operating income from the segment jumped 23%.

Fox is the owner of Twentieth Century Fox studio, cable channels Fox News and FX and the Fox broadcast network.

Rupert Murdoch split his media empire in 2013, with entertainment assets going to 21st Century Fox and the publishing assets, including The Wall Street Journal, going to News Corp.

Mr. Murdoch stepped down as chief executive of 21st Century Fox last summer, handing the reins to his son James. The elder Mr. Murdoch stayed on as executive chairman at Fox. His older son, Lachlan, was named executive co-chairman.

In an earnings call with analysts, 21st Century Fox Chief Executive James Murdoch focused on the company's digital efforts, including its agreement to license its channels to a new online cable TV-style service that Hulu announced earlier on Wednesday. Hulu is co-owned by 21st Century Fox, Walt Disney Co. and Comcast Corp.

"Over the long term, but approaching quickly, all video entertainment will be consumed over IP streaming networks," he said, adding that this environment would be a much more competitive one that would demand better content.

Fortunately, he said, due to investments in content in the last few years, "We are in a better place in almost all of our business creatively."

Discussing Hulu's planned service, Mr. Murdoch called it a "precedential move" that it would help it pave the way for working with other new entrants and "grow our direct-to-consumer capability."

Asked how Fox would get feeds from its local TV station "affiliates" up on the service -- a task that has proved challenging for other streaming players -- Mr. Murdoch said "we would be able to anticipate substantially national coverage pretty soon," but added that "each affiliate group is different."

In the quarter, the company reported a steeper loss from Hulu, though it didn't offer specific figures.

Overall, 21st Century Fox reported a net profit of $841 million, or 44 cents a share, down from $975 million, or 46 cents a share, a year earlier.

Net income from continuing operations attributable to stockholders was $844 million, down from $990 million in the year-earlier period.

Excluding certain items, per-share profit rose to 47 cents from 42 cents. Revenue rose 5.7% to $7.23 billion.

Analysts had projected 47 cents in adjusted earnings per share on $7.18 billion in revenue, according to Thomson Reuters.

--Lisa Beilfuss contributed to this article.

Write to Nathan Becker at nathan.becker@wsj.com and Keach Hagey at keach.hagey@wsj.com

 

(END) Dow Jones Newswires

May 05, 2016 02:48 ET (06:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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