Fox Earnings Top Estimates as Disney Sale Looms
By Brent Lang
LOS ANGELES (Variety.com) – The box office success of “Deadpool 2” and the continued ratings strength of Fox News bolstered earnings at 21st Century during its most recent financial quarter. The media conglomerate’s income rose 18% to $7.94 billion, while earnings per-share increased 58% to 57 cents.
That easily topped Wall Street’s estimates. Analysts expected Fox to post revenues of $7.56 billion and earnings of 54 cents a share, according to Thomson Reuters.
It’s a time of great change for the media empire behind 20th Century Fox, Fox News, and FX. Namely, one that will see most of its film and television assets shift under the control of the Walt Disney Company. In July, shareholders in the two companies approved a $71.3 billion deal for Disney to buy 20th Century Fox, FX, and NatGeo, as well as partial ownership of Sky TV, India’s Star and Hulu. Fox is being reconstituted into a new company that will be centered around its broadcast channel, Fox News, sports channel FS1, and other television assets.
On a call with analysts shortly after Fox unveiled its earnings report, Fox CEO James Murdoch said the merger is “getting to the finish line.” Fox also said it will not host a similar call during the next financial quarter due to the pending sale. That signals that final details of the merger should be wrapped up soon.
Fox’s cable arm saw earnings climb 12% to $1.61 billion, which it attributed to higher advertising revenue and affiliate fees. The company’s film division also improved, logging a $289 million profit compared to a $22 million loss in the prior-year quarter. The broadcasting unit, however, saw profits fall $31 million to $106 million because of higher programming costs related to its airing of the FIFA World Cup.
Even as it looks to sell many of the holdings that patriarch Rupert Murdoch spent decades cobbling together, Fox has one last corporate battle remaining. The company is engaged in a bidding war with Comcast for the remaining 61% of Sky, the European pay TV giant that it has long covetted. Fox filed paperwork Tuesday that gives it several more weeks to come up with a new bid to take over the company. Its current offer values Sky at £14 per share, less than Comcast’s bid of £14.75 share, which values Sky at $34 billion. At present, the recommendation of Sky’s independent directors is to accept Comcast’s bid, which would dramatically enhance the cable giant’s international sway.
Shares of Fox closed Wednesday down .22% at $44.96.
