Fox fi­nan­cial re­port a mixed bag

Los Angeles Times - - COMPANY TOWN - By David Ng david.ng@la­times.com

A lack of box-of­fice hits clouded oth­er­wise healthy fi­nan­cial re­sults for 21st Cen­tury Fox in the fourth quar­ter, which saw strong af­fil­i­ate and ad­ver­tis­ing rev­enue at its ca­ble net­works divi­sion.

The me­dia con­glom­er­ate re­ported fis­cal fourth-quar­ter earn­ings that ex­ceeded ex­pec­ta­tions while record­ing a loss at its filmed en­ter­tain­ment divi­sion due in part to lower rev­enue at its sto­ried movie stu­dio.

Shares of New York­based Fox fell in af­ter-hours trad­ing Wed­nes­day be­fore mak­ing up for the drop. The stock had closed the day down about half a per­cent to $27.90.

Fox re­ported ad­justed earn­ings per share of 36 cents in the quar­ter, com­pared with 45 cents a year ago. That ex­ceeded a fore­cast of 35 cents per share, ac­cord­ing to an­a­lysts polled by Fac­tset.

Rev­enue for the pe­riod nar­rowly missed ex­pec­ta­tions, com­ing in at $6.75 bil­lion, up 2% from a year ago, com­pared with the $6.79 bil­lion ex­pected by an­a­lysts.

The com­pany’s filmed en­ter­tain­ment divi­sion, which in­cludes its movie and TV stu­dios, swung to a $22-mil­lion loss for the quar­ter, com­pared with $164 mil­lion in op­er­at­ing profit in the same pe­riod a year ear­lier.

For the full fis­cal year, op­er­at­ing in­come for Fox’s filmed en­ter­tain­ment divi­sion was $1.05 bil­lion, down $34 mil­lion from the prior year. Fox at­trib­uted the de­cline to a for­eign-ex­change fluc­tu­a­tion, but the com­pany also saw weaker rev­enue at its film stu­dio.

While its L.A.-based stu­dio had hits with “Lo­gan” and “Hid­den Fig­ures,” it also ex­pe­ri­enced a box-of­fice dis­ap­point­ment with “Alien: Covenant,” which opened in the U.S. dur­ing the quar­ter and has grossed only $74.2 mil­lion do­mes­ti­cally.

Fox also said it ex­pe­ri­enced sig­nif­i­cant re­lease costs dur­ing the pe­riod for movies in­clud­ing “War for the Planet of the Apes.” The com­pany also cited lower rev­enue at both the film and tele­vi­sion stu­dios.

Fox said over­all rev­enue for the quar­ter was driven by higher af­fil­i­ate and ad­ver­tis­ing rev­enue at its ca­ble net­work pro­gram­ming divi­sion. Fox News re­mains the toprated ca­ble news net­work de­spite fac­ing mul­ti­ple sex­ual ha­rass­ment law­suits against the chan­nel.

For the full fis­cal year, Fox re­ported ad­justed earn­ings per share of $1.93, up 12% from the year-ear­lier re­sult of $1.73. Rev­enue was $28.50 bil­lion, an in­crease of 4% from the $27.33 bil­lion re­ported in the prior year.

Fox is still await­ing Bri­tish ap­proval for its $14-bil­lion bid to take con­trol of Europe’s largest pay-TV com­pany, Sky.

“We re­main con­fi­dent our trans­ac­tion will be ap­proved, but more likely in the first half of 2018 than be­fore the end of this cal­en­dar year,” James Mur­doch, chief ex­ec­u­tive of Fox, said in an in­vestor call on Wed­nes­day.

Drew Angerer Getty Im­ages

EARN­INGS at 21st Cen­tury Fox beat ex­pec­ta­tions even as its filmed en­ter­tain­ment divi­sion posted a $22mil­lion loss for the fourth quar­ter. Above, Ru­pert Mur­doch and his son Lach­lan Mur­doch, both Fox chair­men.

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