21st Century Fox Earnings Buoyed by Cable TV Business -- WSJ
August 10 2017 - 3:02AM
Dow Jones News
By Maria Armental
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 10, 2017).
Higher fees for the Fox News, FX and sports cable networks
lifted revenues for 21st Century Fox Inc. and helped offset weak
performances from the Fox Broadcasting and film units in the most
recent quarter.
The cable networks unit reported a 10% gain in the fees pay-TV
distributors pay to carry the channels compared with the same
period a year ago. Domestic advertising revenue was up 6%, driven
by higher ratings at Fox News and price increases at National
Geographic, even as Fox Sports 1 and the regional sports networks
carried fewer marquee events.
The importance of news and sports to 21st Century Fox was
emphasized by Co-Executive Chairman Lachlan Murdoch, who told
analysts that news and sports account for more than half the
company's advertising revenue. Advertising brought in $8 billion in
the fiscal year ended in June.
The picture was bleaker at 21st Century Fox's broadcast network
and film studio.
At the studio, filmed entertainment swung to an operating loss
of $22 million, which was attributed to a decline in home
entertainment revenues and higher marketing costs for summer movies
including "War for the Planet of the Apes."
Fox Broadcasting, which has been mired in a ratings slump for a
few years, experienced a drop in ad revenue that was partially
offset by an increase in the fees distributors pay to carry the
Fox-owned television stations.
Overall, the company modestly beat analysts' earnings estimates
and fell just shy of revenue projections.
Net income for 21st Century Fox fell to $476 million, or 26
cents a share, in the quarter. Excluding restructuring charges and
other items, profit fell to 36 cents a share from 45 cents a share
a year earlier, when results included a tax benefit of 7 cents a
share.
Revenue rose to $6.75 billion, from $6.65 billion a year
earlier.
Analysts surveyed by Thomson Reuters had projected adjusted
profit of 35 cents a share on $6.77 billion in revenue.
The Wall Street Journal parent News Corp and 21st Century Fox
share common ownership.
The results come as 21st Century Fox seeks to buy the shares of
British TV giant Sky PLC it doesn't already own. The deal remains
under review in the U.K. On a conference call with analysts, 21st
Century Fox Chief Executive James Murdoch said he expected approval
to come in the first six months of next year.
Fox News turned in a strong financial performance, despite the
turmoil inside the network over the past year.
The network continues to deal with lawsuits and accusations of
sexual harassment and racial discrimination that have led to
several high-level departures, both in front of the camera, such as
host Bill O'Reilly, and in the executive suites, including that of
its former chief executive, Roger Ailes. Mr. Ailes and other
individuals accused have denied the allegations; Mr. Ailes died in
May. Fox hired a law firm to investigate the claims and has said it
is cooperating with a federal probe related to the allegations.
In a memo to employees released with its earnings announcement,
James and Lachlan Murdoch said the company is "committed to being
an organization where anyone, from anywhere, feels welcome and can
thrive."
For the nine months through March 31, the company disclosed $45
million in costs related to settlements and legal expenses
following Mr. Ailes's July 2016 departure.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
August 10, 2017 02:47 ET (06:47 GMT)
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