Fox's results are helped by the Super Bowl. Above, the company's sign outside its Los Angeles studio.REUTERS
21st Century Fox Inc. FOXA -0.89% posted solid operating profit growth for the March quarter, driven by its cable networks business and advertising revenue from the Fox broadcast network's airing of the Super Bowl.
The media giant's operating income before depreciation and amortization, or OIBDA, rose 14%, even as it increased spending on programming and new channels, such as Fox Sports 1 and FXX.
21st Century Fox was formed last year from the split of News Corp NWSA -0.35% into two companies. The company housing the entertainment businesses changed its name to 21st Century Fox, while the publishing assets, including The Wall Street Journal, retained the News Corp name. News Corp is slated to report its earnings on Thursday.
Overall in the third quarter, 21st Century Fox reported a profit of $1.05 billion, or 47 cents a share, down from $2.9 billion, or $1.22 a share, a year ago. The drop was largely due to a one-time accounting gain last year related to the company's acquisition of a controlling stake in satellite operator Sky Deutschland AGSKYD.XE +0.09% . Adjusting for that transaction and other items, per-share profit rose to 47 cents from 32 cents. Revenue increased to $8.22 billion from $7.35 billion.
The cable network unit, which accounts for the majority of the company's profit, posted a 10% jump in OIBDA to $1.2 billion, helped by strong growth in subscription revenue from pay-TV operators. Cable network revenue rose to $3.15 billion from $2.82 billion. The revenue growth was partially offset by a 12% increase in expenses, more than half of which was due to the launch of new channels.
The broadcast television unit reported a 32% rise in OIBDA of $288 million, largely because of the Fox network's airing of the Super Bowl and the NFL playoffs. The Super Bowl alone delivered $350 million in advertising revenue. More broadly, though, Fox's prime-time ratings have suffered—especially the singing-competition show "American Idol," now in its 13th season.
"The performance of the entertainment network remains disappointing," Chase Carey, 21st Century Fox's president and chief operating officer, said on an earnings call. "The need for breakthrough programming has never been greater."
He said the Fox network's struggles have made it more difficult to reach the company's target of generating $9 billion of operating profit in fiscal 2016, though 21st Century Fox still promises to hit that number.
Mr. Carey addressed speculation about his continued employment at the company, saying he has an "understanding" with Chairman and CEO Rupert Murdoch for a renewal of his contract, which expires June 30. "We simply haven't gotten it on paper," he said. "We have a clear understanding of where we are going."
Television production drove profit growth at 21st Century Fox's filmed entertainment division, which reported a 6% increase in OIBDA. The company increased revenue from sales of programming to subscription online-video services like Amazon.com Inc.AMZN -1.57% 's Prime Instant Video.
Direct broadcast satellite television revenue increased to $1.53 billion from $1.32 billion, while operating profit fell to $58 million from $91 million. Expenses rose because of Sky Italia's broadcast of the Sochi Olympics and Sky Deutschland's exclusive broadcast of Bundesliga soccer.
No comments:
Post a Comment