21st Century Fox Reports Mixed Quarterly Earnings

Rupert Murdoch - Getty - H 2018
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The Fox News Channel helped the Rupert Murdoch-controlled company post record earnings at its cable segment.

21st Century Fox came up short on earnings but slightly beat the expectations of Wall Street on revenue in the most recent quarter when it reported financial results on Wednesday.

The conglomerate controlled by Rupert Murdoch earned 49 cents per share with $7.42 billion in revenue, while analysts expected Fox to earn 53 cents a share on $7.4 billion revenue.

In both revenue and operating income, Fox grew its largest segment, cable network programming, while the other two segments, television and filmed entertainment, shrunk compared to a year ago.

The shrinkage in television is owed to the NFL, since last year Fox had the Super Bowl, plus there were declines in ratings for postseason games this time around. Also, Fox had three fewer NFL broadcasts during the quarter than it had last year.

It's an interesting time at Fox, as it has agreed to sell the bulk of its assets to Disney for $52.4 billion but Comcast might be willing to offer more. The remaining assets not bought by Disney (or perhaps Comcast)  is being called New Fox for now.

Meanwhile, Fox is still attempting to purchase the 61 percent of Sky it doesn't already own, but Comcast has already bid $31 billion to acquire all of the European broadcast giant.

Also on Wednesday, Fox agreed to pay $910 million for seven stations owned by Sinclair Broadcast, a move designed to appease regulators who may object to Sinclair's $4 billion bid to acquire Tribune Media.

As for its earnings, Fox boasted that its cable segment delivered 16 percent growth and its highest earnings ever for its fiscal third quarter, with the Fox News Channel earning more before interest, taxes, depreciation and amortization than it ever has during a quarter.

Filmed entertainment benefited from strong box office for The Greatest Showman, The Shape of Water and Maze Runner: The Death Cure, but the segment was hurt by lower worldwide syndication revenues at Fox's television production business.

Executive chairmen Rupert and Lachlan Murdoch said in a joint statement that "our film studio delivered box office and awards momentum that we expect to continue with the upcoming release of Deadpool 2."

During a conference call with analysts, Lachlan Murdoch said he wouldn't discuss speculation that Comcast may bid for some of Fox's assets, and he said "planning for New Fox is well underway." 

Pressed for more details, the exec said Fox is "committed to our agreement with Disney" but that the board is obligated to consider competing offers.

Fox CEO James Murdoch said, as he has before, that Fox is considering its options regarding Comcast's effort to purchase Sky, and added that he advocates for a "robust regulatory review," like the one Fox has been going through since it struck a deal for the 61 percent of Sky it doesn't own.