Fox News continues to reel in the dough, as cable networks propelled 21st Century Fox to another strong quarter during a week when it was revealed that Rupert Murdoch’s media giant held talks to sell much of the company to rival Disney.
After markets closed Wednesday, 21st Century Fox reported revenue of $7 billion and earnings of 49 cents a share for the three months ending Sept. 30, which the entertainment conglomerate categorizes as its fiscal first quarter. That compares with the $6.51 billion in revenue and earnings of 51 cents a share Fox reported for the same period the previous year. Fox exceeded the $6.86 billion in revenue projected by analysts and matched the earnings of 49 cents a share they had forecast.
“The Company’s double-digit gains in affiliate revenues demonstrate our strength in the dynamic global market for distinctive video brands and content, across both established distributors and new entrants,” Executive Chairmen Rupert and Lachlan Murdoch said in a statement accompanying the earnings. “We delivered top-line growth at all of our businesses, backed by stand-out storytelling, sports and news, as well as a product focus that will drive greater consumption and compelling opportunities for financial returns on our content investment. Our solid first quarter performance puts us on track to achieve our overall financial and operational objectives for this fiscal year.”
While a wave of cord-cutting has taken a bite out of plenty of media stocks, Fox has held up fairly well behind ratings powerhouse Fox News, which remains profitable despite a series of sexual harassment and discrimination scandals. And although NFL ratings are down as players protesting during the national anthem has dominated the news cycle and driven some fans away for the sport for political reasons, Fox — one of the league’s primary broadcasters — hasn’t suffered too much, with its broadcast revenue for the three months ended Sept. 30 topping its performance for the same time last year. However, profits were down as the network spent higher fees for sports rights.
Fox’s film studio did suffer from the summer’s weak box office, as “War for the Planet of the Apes” became the lowest-grossing film in that franchise despite generally positive reviews, but the company’s movie division also exceeded its revenue from the corresponding period last year, although profits were down.
However, the big news of the week was the revelation of Fox’s talks with Disney, which would have seen the Mouse House acquire Fox’s film and TV studios and many of its cable channels, including FX and Nat Geo. Fox News and Fox Sports would not have been part of the deal. Fox’s stock is up more than 12 percent this week on reports of those discussions.
On the company’s earnings call, Lachlan Murdoch immediately headed off any discussion of the potential Disney deal, saying at the beginning that the company’s executives would “not be responding, at all, to recent press speculation.”
Fox also announced in its earnings release that it expects its acquisition of the remainder of British broadcaster Sky to close by June 30, 2018.