21st Century Fox Q3 Profit Dips

NEW YORK: 21st Century Fox reported net income of $975 million for its third fiscal quarter, compared to $1.05 billion in the prior-year period, with gains in its cable network programming unit offset by declines at its TV segment.

The media and entertainment giant, controlled by Rupert Murdoch, reported quarterly revenues of $6.84 billion, a decline from the $8.22 billion in revenue reported in the same period a year ago. Excluding the prior year quarter’s net revenues from the Direct Broadcast Satellite Television businesses, Sky Italia and Sky Deutschland (which were sold in November 2014 to Sky), adjusted revenues increased 1 percent. There were double-digit increases at the cable network programming segment from higher affiliate revenues, largely offset by declines at the company’s television segment, due primarily to the absence of revenues generated from the broadcast of Super Bowl XLVIII in the prior year.

Cable network programming quarterly segment OIBDA increased 5 percent to $1.23 billion, led by a 14 percent revenue increase on strong affiliate revenue growth. The revenue improvement was partially offset by a 19 percent increase in expenses (much of which reflected the impact of the planned investments in new channels, primarily STAR Sports and FXX). The growth in expenses at the new channels was led by increased rights fees related to the broadcast of the ICC Cricket World Cup at STAR Sports and increased programming costs at FXX led by The Simpsons.

Television generated quarterly segment OIBDA of $141 million, down 51 percent on the prior-year quarter. The segment was impacted by the absence of advertising revenue and OIBDA generated from the broadcast of the Super Bowl in the prior-year quarter, as well as higher entertainment programming costs at FOX from a higher volume of original series, including Glee and Empire, in the current year quarter as compared to more series repeats in the prior year quarter. Strong retransmission consent revenue growth was offset by a 7 percent decline in ad revenues, reflecting overall lower general-entertainment ratings at FOX.

Filmed entertainment, meanwhile, posted Q3 OIBDA of $382 million, an 8 percent lift. This growth was led by a 5 percent increase in revenues and reflects increased contributions from the film studio, led by the performance of the successful theatrical releases Taken 3 and Kingsman: The Secret Service in the current quarter and theatrical and home entertainment contributions from Penguins of Madagascar. This growth was partially offset by lower contributions from the television production business, due to lower SVOD revenues resulting from the prior-year sale of several series to Amazon, including 24 and The Americans.

Chairman and CEO Rupert Murdoch said: “In the fiscal third quarter, we delivered double-digit affiliate revenue growth at our cable networks and continued our strong operating performance at our film studio. Our results reflect the underlying strength of our business even as it was impacted by an unfavorable comparison for our broadcast television businesses without the Super Bowl and ongoing currency headwinds. In addition, we’re seeing real momentum from our continued investments in our global channels business, most notably with the ICC Cricket World Cup broadcasts on STAR Sports in India which broke both linear and digital viewing records.”