The Murdoch boys have a lot to like about their most recent financial quarter.
Robust ad sales and higher affiliate fees at 21st Century Fox’s cable networks helped revenues climb during the three-month period ending in December, helping the media conglomerate behind Fox News, 20th Century Fox, and Fox broadcasting easily top Wall Street’s forecasts.
The cable arm also helped offset a decrease in Fox’s television and film divisions. Quarterly revenues topped off at $8.04 billion, a 5% increase from the $7.68 billion of revenues reported in the prior-year quarter. It also reported earnings of 42 cents a share, down from 53 cents a share in the prior-year period. Despite the drop in profits, it translated into a healthier picture than had been expected. Analysts had projected that Fox would bring in $7.94 billion in revenues and earnings of 38 cents a share.
The report comes as Fox has reached a deal to sell the bulk of its film and television assets to the Walt Disney Company in a deal valued at $52.4 billion. The pact is still awaiting regulatory approval. It’s not that Fox will disappear entirely, however. Rupert Murdoch and his family, the founders of Fox, will then spin off Fox Broadcasting Co., Fox Sports, Fox News, Fox Television Stations, and a handful of other assets into a new company that will have revenue of $10 billion and earnings of about $2.8 billion.
In the meantime, James Murdoch, CEO of 21st Century Fox, told analysts on an earnings call Wednesday that it was “business as usual” at the company until the government approves its sale to Disney.
“We’re very much operating this business at a high velocity,” said Murdoch.
Fox’s broadcast division got dinged by lower football ratings and declining World Series viewership. It also suffered tough comparisons to the prior year when the U.S. presidential campaign contributed to a surge in political ad spending.
Fox’s film studio fielded hit films such as “Murder on the Orient Express,” “The Greatest Showman,” “The Shape of Water,” and “The Post” during the period. However, most of those profits will be recorded in future quarters. Instead, revenues for the studio declined due to the cost of promoting and distributing those films.
James Murdoch did provide some rare insight into Fox’s digital MVPD operation, reporting that the networks have 4 million subscribers.
Shares of Fox closed Wednesday down more than 2% at $36.06.