21st Century Fox Posts Q4 Profit on Strong Film, Cable Results

NEW YORK: 21st Century Fox saw its fourth-quarter net earnings rise, thanks to gains from its filmed entertainment segment and cable networks.

The company, which recently called off its bid to take over Time Warner, reported quarterly revenues of $8.42 billion, a 17-percent increase over the same period a year ago. This was lifted by an increase at the filmed entertainment segment, which was led by higher theatrical revenues, and also double-digit growth at the cable network programming and direct broadcast satellite (DBS) television segments. Cable got a boost from higher affiliate revenues, while DBS was helped by solid subscription revenues. Operating income gained 19 percent to $1.77 billion.

Net income for the fourth quarter was down slightly, from $977 million in the year-ago period to $966 million. The company noted the impact of higher costs from depreciation expenses associated with it taking majority stakes in Sky Deutschland and the YES Network. The results did include a $50 million gain from the company's participation in the BSkyB stock repurchase program.

At Fox's cable network business, operating income was up 11 percent to $1.2 billion. This was driven by a 13-percent revenue increase led by continued affiliate revenue growth. Expenses were up 14 percent because of investments in newly launched channels.

Television reported quarterly segment OIBDA of $145 million compared with the $213 million reported in the prior year's quarter, as increased retransmission consent revenues were more than offset by lower ad revenues. Quarterly advertising revenues declined 11 percent from the same period of the prior year, driven by the impact of lower general-entertainment ratings, led by declines at American Idol.

Filmed entertainment saw Q4 OIBDA of $339 million, which is nearly triple the $117 million reported in Q4 2013. This was driven by a $768 million revenue increase. There were several successful releases to credit for the gains, including X-Men: Days of Future Past, Rio 2 and The Fault in Our Stars. Quarterly results also reflect higher contributions from the television production businesses led by the syndication of Modern Family and the delivery of a new installment of 24.

DBS generated quarterly segment OIBDA of $146 million compared with the $156 million reported in the same period a year ago. The $214 million in revenue, reinforced by sustained Sky Deutschland subscriber growth, was more than offset by higher sports programming costs, including Sky Italia’s broadcast of the FIFA World Cup and Sky Deutschland’s exclusive broadcast of Bundesliga soccer.