21st Century Fox Beats Quarterly Earnings Projections

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Rupert Murdoch

Shares were up 4 cents to $45.46 during the regular session.

21st Century Fox, the Rupert Murdoch-controlled media conglomerate that is selling most of its assets to Walt Disney, said Wednesday it earned 57 cents per share after certain items on $7.94 billion in revenue, more than what Wall Street had predicted.

Analysts were expecting 54 cents in per-share earnings on $7.55 billion in revenue in the company's fiscal fourth quarter.

Shares of Fox were up 4 cents to $45.46 during the regular session on Wednesday and up about 12 cents after the closing bell, but the stock trades primarily on its value to Disney, which is paying $71.3 billion for the bulk of the company.

The Fox-Disney partial merger has the Fox film and TV studio, Nat Geo, FX Networks, Star India, 39 percent of Sky and 30 percent of Hulu going to Disney, along with 22 regional sports networks that Disney will sell in a nod to the U.S. Justice Department, which worried that the RSNs coupled with ESPN would create a sports monopoly.

What's left should the Disney-Fox transaction clear regulatory hurdles will be the Fox broadcast network, FS1, FS2, Fox Business Network and the Fox News Channel, which, collectively, is known for now as New Fox.

The conglomerate's filmed entertainment segment posted operating income of $289 million in the quarter, reversing a loss of $22 million a year earlier on the success of Deadpool 2 and The Greatest Showman.

All three segments — cable network programming, television and filmed entertainment — boosted their revenue, and two of the three improved their operating income, the exception being television, where costs associated with broadcasting the FIFA World Cup hurt the bottom line.

Fox said its 39 percent stake in Sky earned $79 million in the quarter, while its 30 percent stake in Hulu caused a $127 million loss.

Executive chairman Lachlan Murdoch boasted that Fox News is still the top cable news network and that Fox Business and Fox Sports have each been enjoying record viewership, which bodes well for New Fox.

"Live sports is clearly the most valuable content in our industry," he said Wednesday during a conference call.

Fox said that a new deal for Thursday Night Football will initially hurt the TV segment due to the high cost associated with those rights, but that political advertising associated with the upcoming mid-term elections will help. In time for those elections, Fox News will launch a streaming product called Fox Nation, Murdoch noted.

He predicted the Disney transaction will close in the first half of next year, and that the company is now focused on gaining regulatory approval worldwide, since the U.S. Justice Department already seems satisfied.