Bloomberg News

21st Century Fox Reports Sales That Top Analysts’ Estimates (3)

February 06, 2014

21st Century Fox Inc. (FOXA:US), the film and TV company controlled by billionaire Rupert Murdoch, posted second-quarter sales that topped analysts’ estimates, boosted by Sky Deutschland AG revenue and growing programming fees.

Sales grew 15 percent to $8.16 billion in the period, which ended Dec. 31, the New York-based company said today in a statement. Analysts had estimated $7.87 billion on average, according to data compiled by Bloomberg. Excluding some items, earnings were 33 cents a share, matching predictions.

Satellite TV results were bolstered by the addition of complete results from Sky Deutschland, which became a majority owned subsidiary in January 2013. Fox’s cable programming also fueled revenue gains, climbing 14 percent to $2.96 billion in the quarter. Broadcast TV and movie entertainment grew more slowly as the company struggled with low ratings, marked by “The X Factor,” and a drop in holiday film results. Domestic box-office revenue shrank by a third in the final three months of 2013, according to Box Office Mojo.

“It’s important for us to continue to be opportunistic and open-minded as someone continuing to find new programming,” John Nallen, chief financial officer, said on a conference call.

Shares of Fox, which separated from Murdoch’s News Corp. in June, rose 1.4 percent to $32.15 at the close in New York. The Class A shares had gained 9.4 percent since the split, compared with 18 percent for the 15-stock S&P 500 Media Index.

YES Network

Fox also is increasing its stake in the YES Network to 80 percent and will begin including results from the New York-area sports outlet on the same basis when the deal closes.

The costs of rolling out Fox Sports 1 and FXX, two new cable channels, also weighed on profit last quarter, the company said.

“We remain confident that these investments, together with our demonstrated ability to consistently grow our revenues, will drive 21st Century Fox’s future profits and cash flow,” Murdoch, who serves as chairman and chief executive officer, said in the statement.

Net income from continuing operations fell about 7 percent to $982 million, or 43 cents a share, from $1.06 billion, or 45 cents, a year earlier. The latest results included a $79 million increase in depreciation and amortization costs related to the Sky Deutschland takeover.

Poor results in Fox’s film division and weaker prime-time ad sales led the company to lower its guidance for its fiscal 2014. Earnings before interest, taxes, depreciation and amortization will grow in the mid- to high- single-digit percentage range. The company, which posted $6.26 billion last year, had previously said earnings might climb in the low double digits.

To contact the reporters on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net; Alex Barinka in New York at abarinka2@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • FOXA
    (Twenty-First Century Fox Inc)
    • $35.05 USD
    • -0.25
    • -0.71%
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