21st Century Fox exceeded earnings expectations by reporting a quarterly profit of 54 cents on an adjusted basis even though revenue of $7.56 billion was a tad light, and the company on Wednesday shed more light on how much allegations of sexual misconduct at Fox News have cost thus far.
Fox was expected to earn about 48 cents per share in its fiscal third quarter, which would have represented around a 2 percent year-over-year increase. Wall Street was looking for about $7.68 billion in revenue.
Wednesday’s earnings report comes at a precarious time for the conglomerate run by Rupert Murdoch and his sons, as cash-cow Fox News in the past year has lost top executives Roger Ailes and Bill Shine as well as its former No. 1 host, Bill O’Reilly.
In its regulatory filing on Wednesday that laid out its financial performance, the company disclosed that “approximately $10 million and $45 million, respectively, of costs related to settlements of pending and potential litigations” followed the July 2016 resignation of Ailes.
The filing also reveals that the parent company has settled some claims of sexual harassment at Fox News and is contesting other claims in litigation. “To date, none of the amounts paid in settlements or reserved for pending or future claims is, individually or in the aggregate, material to the company,” the filing reads.
Shares of Fox were off 1 percent during the regular session on Wednesday but dipped another 5 percent after the closing bell.
Charges that Ailes and O’Reilly sexually harassed colleagues could also hamper the parent company’s ability to purchase the portion of European satellite TV concern Sky that it already doesn’t own. Executives on a conference call Wednesday to discuss earnings mostly avoided the issue, though.
Amid this backdrop, Fox reported $4 billion in revenue at its cable network programming segment, up 2 percent from a year ago, and $1.7 billion for its television segment, up 31 percent.
Co-executive chairman Lachlan Murdoch told analysts on Wednesday that Fox News has enjoyed 61 straight quarters of leading all cable news in the most important demographics and in primetime.
Advertising and affiliate fee revenue remains strong at Fox News, executives said on Wednesday. In the cable network programming segment, affiliate revenue was up 8 percent, thanks mostly to Fox News, FS1, FX and the regional sports networks.
Filmed entertainment revenue dropped 3 percent to $2.26 billion, mostly because year-ago comparisons included Deadpool in theaters and The Martian in home entertainment.
As for operating income, cable network programming was up a little but filmed entertainment was down, and television led the way with 52 percent growth to $190 million, mostly due to ad sales for the broadcast of Super Bowl LI.
