21st Century Fox Beats Earnings Expectations on Record Film Results

James and Rupert Murdoch
James and Rupert Murdoch
 AP Images/Invision

A day after abandoning its bid to merge with Time Warner, 21st Century Fox on Wednesday posted quarterly earnings and revenue that exceeded Wall Street's expectations, in part due to strength in its filmed entertainment segment.

The conglomerate controlled by CEO Rupert Murdoch posted earnings per share of 43 cents in its fiscal fourth quarter on revenue of $8.4 billion.

Analysts had expected 21st Century Fox to earn 39 cents per share on $8 billion revenue. A year earlier, the company earned 42 cents per share on revenue of $7.2 billion.

The company said its filmed entertainment segment posted $2.8 billion in revenue, up 38 percent from the same quarter a year earlier and $339 million in operating income, up 190 percent.

Leading the film segment higher were global hit movies X-Men: Days of Future Past, Rio 2 and The Fault in Our Stars.

Murdoch had been trying to merge 21st Century Fox with Time Warner for $80 billion, or $85 per share, but the offer was rebuffed — and instead of increasing the bid, the multi-billionaire media mogul said Tuesday he was backing away from the effort.

During a conference call with analysts Wednesday to discuss earnings, Murdoch spoke of Time Warner's refusal to seriously engage in merger discussions and he noted that 21st Century Fox stock fell when investors learned about the merger effort. For those reasons, he said, a merger is "no longer attractive to Fox shareholders." He added: "This is our resolute decision."

In case there was any confusion about the matter, COO Chase Carey also criticized Time Warner for being "highly defensive" and reiterated that negotiations are over. He insinuated Time Warner's board was so demanding that any deal struck would only benefit its own shareholders and there'd be little left for shareholders of 21st Century Fox.

"Let me be clear: we are done ... we have moved on," Carey said, before adding that 21st Century Fox also isn't interested in merging with a different, large competitor.

"You look at all our best businesses, we started them ourselves," Murdoch added. "We have no plans to go out on the acquisition trail."

During the regular session Wednesday, shares of 21st Century Fox rose 3 percent and another 4 percent after the closing bell. Shares of Time Warner, meantime, were crushed because of the failed merger attempt, falling 13 percent in regular trading Wednesday.

In the most recent quarter, 21st Century Fox said its cable network programming segment grew revenue to $3.34 billion from $2.95 billion a year ago, and direct broadcast satellite television grew its revenue to $1.59 billion from $1.38 billion.

The television segment, though, fell to $1.03 billion from $1.1 billion as lower ratings for American Idol and The X Factor took a toll.

Email: Paul.Bond@THR.com

 

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