21st Century Fox Inc. reported fourth-quarter profit that beat analysts’ estimates, citing gains from films and cable TV, one day after dropping its $75 billion bid for Time Warner Inc. (TWX:US)
Profit excluding items at Rupert Murdoch’s entertainment business rose to 42 cents a share from 31 cents a year earlier, New York-based Fox said today in a statement (FOXA:US). Analysts were anticipating 39 cents, the average of 18 estimates. Revenue grew 17 percent to $8.42 billion in the period ended June 30, beating projections (FOXA:US) of $8 billion.
Box-office sales from “X-Men: Days of Future Past” and “Rio 2” and the addition of the YES Network helped overcome a tough climate for cable ads and Fox Broadcasting’s struggle to come up with new hits to succeed the fading “American Idol.” With the Time Warner bid off the table, Fox executives will have to count on those businesses to boost investor returns and meet a goal of $9 billion cash flow by fiscal 2016.
“We need to see that the story is real,” Barton Crockett, an analyst at FBR Capital Markets who recommends the stock, said by telephone before the release, “that this is a content power house that will power double-digit growth in fees from distributors around the world.”
Operating income before depreciation and amortization grew 19 percent to $1.77 billion, the company said.
Fox yesterday withdrew its $85-a-share bid for Time Warner, owner of the HBO and TNT cable channels, and the Warner Bros. film studio. At the same time, Fox announced a $6 billion stock buyback authorization.
Fox rose 1.9 percent to $32.95 in extended trading after the results were announced. The Class A shares gained 3.3 percent to $32.33 at the close in New York, after Fox dropped its cash-and-stock Time Warner bid. The Murdoch family controls the company through its 39 percent ownership of the Class B voting stock.
Last year, Murdoch, 83, split off the slower-growing News Corp. publishing business from his film and TV operations. The print-media business includes the Wall Street Journal and the New York Post.
(Fox plans a conference call at 4:30 p.m. New York time. Go to http://investor.21cf.com to listen)
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