21st Century Fox reported a gain in second-quarter profits on proceeds from the sale of its direct broadcast satellite businesses and strong results from its cable networks.
The company said second fiscal quarter income from continuing operations was $6.22 billion, or $2.89 per share, up from $982 million, or 43 cents per share. That includes a $5.04 billion gain on the sale of Sky Italia and Sky Deutschland. Excluding that gain, and gains from the sales of stakes in National Geographic Channels International and ITV, adjusted earnings per share were 53 cents versus 33 cents a year ago.
Revenues reached $8.06 billion, including $631 million in revenues from direct broadcast operations that were sold. The company said that excluding DBS revenue, adjusted revenues were up 10% to $7.42 billion.
"We delivered solid quarterly results despite continuing currency headwinds and ratings challenges at the Fox broadcast network. Our growth was led by sustained affiliate revenue growth in our channels business,” CEO Rupert Murdoch said in a statement. “In addition to the operational success achieved this past quarter, we also executed two significant strategic transactions, the combination of our European satellite television holdings, creating Europe’s leading pay television business, and the formation of the Endemol Shine Group joint venture. These transactions further enhance our ability to drive long-term value for all of our shareholders."
Operating income rose 12% to $121 million in Fox’s cable network programming business despite continued investment in its new sports channels.
Domestic advertising revenue grew 11% driven by increases at FX Networks, Fox News Channel and Fox Sports 1. Domestic affiliate revenue grew 19%. Domestic operating income rose 13%.
At Fox’s television segment, which includes the Fox Broadcast Network, operating income rose 33% to $290 million. The cancellation of X-Factor and the absence of Glee meant lower programming costs at Fox Broadcasting despite higher payments to the National Football League. Revenues were flat as strong growth in retransmission payments were offset by a 3% drop in ad revenues. The drop in ad revenue was caused by lower ratings at the network and offset gains in political advertising at the Fox stations.
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