×

21st Century Fox Earnings: Cable Gains Can’t Lift Weaker Film Results

UPDATED: Lackluster home entertainment results, a weaker film slate and difficult foreign exchange rates pushed revenues and profits at 21st Century Fox down during the media conglomerate’s most recent fiscal quarter.

Revenues hit $7.38 billion, down 1% from the prior year, missing analysts expectations. Earnings per share topped off at 44 cents compared to 53 cents per share in the year-ago period, which was roughly in line with projections.

Wall Street was expecting earnings of 44 cents a share and $7.51 billion in revenue. It was a quarter that saw the return of Fox’s television hit “Empire,” the release of Ridley Scott’s space epic “The Martian” and several tussles between Fox News and Republican presidential candidate Donald Trump. There’s also been some preemptive belt-tightening. Last week, word leaked that the media conglomerate is initiating a voluntary buyout program as it looks to reduce staff overhead by $250 million in the coming fiscal year.

Investors didn’t like what they saw. Shares of Fox fell more than 5% in after-hours trading to $23.16. Like many media companies, Fox has been hit hard in recent months amid concerns about the health of the cable business. Shares have fallen roughly 27% over the last year.

As for the rest of the fiscal picture, operating income before depreciation and amortization (OIBDA) increased 2% to $1.73 billion for the three-month period ending in December. Net income fell to $672 million. That’s a sharp drop from the $6.28 billion Fox reported in the same quarter in 2014, but comparisons are problematic. The rise in income was attributable to one-time gains from the sale of the company’s shares in Sky Deutschland and Sky Italia to BSkyB.

Both Fox’s film and television divisions saw operating income declines even as its cable business enjoyed healthy gains. The cable arm’s quarterly segment OIBDA increased 8% to $1.25 billion on stronger affiliate revenue growth. Fox’s cable division encompasses Fox News, FX and National Geographic, among other brands.

Fox’s filmed entertainment unit had a hit with “The Martian,” but the home entertainment results for “Spy” and “The Fantastic Four” couldn’t match the windfall enjoyed by the debuts last year of “X-Men: Days of Future Past” and “Dawn of the Planet of the Apes.” Quarterly segment OIBDA hit $302 million, down from the $336 million reported in the same period a year ago.

The television unit also saw softer results, with quarterly segment OIBDA falling $11 million to $279 million, which the company attributed to lower political advertising.

Fox got the wrong end of the currency stick. The company said that a stronger U.S. dollar had hurt revenues from foreign ticket sales and advertising revenues at overseas assets such as Star.

In a call with investors, executive chairman Lachlan Murdoch called the film results “disappointing,” but said the company was heartened by the success of the Oscar-nominated survival epic “The Revenant” and confident in upcoming releases such as the comic-book adaptation “Deadpool.”

There was one area Fox’s leadership wouldn’t touch — James Cameron’s long-delayed sequels to “Avatar.” A follow-up to the highest-grossing film in history was originally slated to hit theaters in 2017, but there have been reports that the film will not be able to make that release date.

21st Century Fox CEO James Murdoch dodged questions about when the film would debut, saying, “When it’s confirmed, we’ll be disclosing that very loudly.”

Popular on Variety

More TV

  • T.J. Dillashaw, right, kicks Cody Garbrandt

    Disney Plans UFC Broadcast for FX

    UFC matches will return to FX  – but not on a permanent basis. ESPN has been showing preliminary bouts to UFC pay-per-view events for the last while on ESPN and ESPN2, and then showing the main card on its ESPN+ subscription video service. In September, the early lineup will air on FX, which the UFC [...]

  • George RR Martin

    George R.R. Martin Says HBO's 'Game of Thrones' Ending Won't Influence Future Novels

    Geroge R.R. Martin is sticking to his original plan when it comes to the future of “Game of Thrones.” In an interview with The Observer, Martin claimed that HBO’s controversial ending for the series would have no affect on the endings of the last two novels. “No, it doesn’t. It doesn’t change anything at all,” [...]

  • Listen: 'Pennyworth' Producer Talks Delving into

    Listen: 'Pennyworth' Executive Producer Talks Delving into Alfred's Backstory

    Bruno Heller may have served as an executive producer on the Batman-inspired series “Gotham” for the past five years, but it’s actually real-life people (not superheroes) that intrigue the producer the most. It’s for that exact reason that Heller’s newest series finds him exploring the origin stories of Batman’s butler Alfred in the Epix drama [...]

  • "Trust Issues" - Dylan and Lizzie

    'Instinct' Canceled After Two Seasons

    CBS has canceled “Instinct” after two seasons. Series creator Michael Rauch announced the cancellation Friday on Twitter, writing, “I’m very sad to relay the news that @instinctcbs won’t be renewed for a 3rd season. We will double up this Sunday and our season/series finale will be Aug 25.” Rauch also thanked series stars Alan Cumming [...]

  • Maisel Day

    My Mostly OK Maisel Day (Column)

    When Amazon announced its first-ever Maisel Day, I was intrigued. For one day, Aug. 15, “The Marvelous Mrs. Maisel” fans and Angelenos (fangelenos?) could hit up various restaurants, theaters and retailers throughout Los Angeles for special deals, all at 1959 prices. Among the gems: $2.50 makeovers, $0.99 pastrami sandwiches and $0.30 for a gallon of [...]

  • Nordisk Film & TV Fond Announces

    Nordisk Film & TV Fond Backs Joachim Trier, Ole Bornedal, Yellow Bird

    Nordisk Film & TV Fond has announced three features, two series and a documentary set to receive $1.4m in financing, as well as distribution, dubbing and cultural initiative support recipients. Doing so, it highlights some of the key titles moving forward in the Nordic region. Already backed by the Danish Film Institute’s largest ever grant [...]

  • TV News Roundup: 'Silicon Valley' Final

    TV News Roundup: 'Silicon Valley's' Final Season Sets October Premiere Date

    In today’s roundup, “Silicon Valley” returns to HBO on Oct. 27 and Quibi greenlights a new cooking competition show “Dismantled.” DATES The fifth season of Netflix‘s “Peaky Blinders” will premiere on the streamer Oct. 4. The newest season will continue to follow one gangster family in the lawless streets of Birmingham, UK during the midst [...]

More From Our Brands

Access exclusive content