February 8, 2018 8:55:46 am
Rupert Murdoch’s Twenty-First Century Fox Inc trounced Wall Street estimates for quarterly profit and revenue on Wednesday, helped by increases in the fees it collects from cable and satellite distributors. Shares of the media company, which is in the process of selling film and television assets to Walt Disney Co, initially climbed 2 percent in after-hours trading, then sank back to the unchanged mark.
Revenue from Fox’s cable division, which houses the Fox News and FX channels among others, rose 11 percent from October through December to $4.41 billion, accounting for more than half of total revenue in the quarter, a Reuters report said.
That beat analysts’ average estimate of $4.33 billion, according to Thomson Reuters I/B/E/S. Fox plans to focus on sports and news after it wins regulatory clearance to sell much of its film, television and international assets to Disney. Last week, Fox announced a deal to air Thursday night National Football League games on its broadcast network for the next five seasons, paying more than $3 billion according to a source familiar with the matter.
Wall Street analysts asked about the deal on a conference call following earnings. Fox executives stood behind it, even though NFL TV ratings have declined for the past two seasons, arguing the scarcity of big, live audiences will continue to make NFL games attractive to advertisers and concentrating more games on one network will help draw viewers. Fox already airs Sunday afternoon NFL games. “We really want Fox to be the home of that kind of compelling product,” said Executive Chairman Lachlan Murdoch.
Revenue at the Fox broadcasting unit fell 5.8 percent to $1.81 billion, as the year-ago quarter included strong ratings during the US presidential election and baseball’s World Series. Profit was hit by higher sports programming costs including more NFL and Big Ten Conference college football games.
Fox, like its peers, has been adapting to keep hold of viewers gravitating toward online streaming services. The company said it now reaches nearly 4 million customers through digital television services. Total revenue rose 4.6 percent to $8.04 billion, beating analysts’ average estimate of $7.94 billion. Revenue at Fox’s film division fell 1 percent to $2.25 billion.
The company said it gained $1.34 billion from the recent US tax law. (http://21.cf/2siO7g9) Excluding items, Fox earned 42 cents per share, topping analysts’ average estimate of 38 cents.
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