Cable Business Powers Fox Revenue Increase -- WSJ
May 05 2016 - 03:03AM
Dow Jones News
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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