Stronger ad revenues at Fox News and the home entertainment debut of “Deadpool” lifted quarterly revenues and income at 21st Century Fox.
The company behind 20th Century Fox, FX, and Fox News saw revenues climb 7% to $6.51 billion, as net income increased 22% to $821 million, or 44 cents per share. That was in line with Wall Street’s expectations. Analysts were expecting earnings of 44 cents on $6.49 billion in revenue.
It was a quarter fraught with drama. Roger Ailes, the controversial chief of Fox News, was forced out following a series of sexual harassment allegations from former anchorwoman Gretchen Carlson. He had been seen as the driving force behind the company’s most profitable division.
The results were also unveiled two weeks after Time Warner agreed to sell itself to AT&T for $85 billion. In 2014, Fox led an unsolicited and ultimately unsuccessful takeover attempt of Time Warner. On a conference call with analysts immediately following the earnings release, Fox CEO James Murdoch said he felt no pressure to get bigger in response to the Time Warner deal.
“Scale for scale’s sake is not something that we think should be pursued,” he said.
The cable news network continued to be a source of strength despite the Ailes imbroglio. Interest in the presidential election lifted domestic advertising revenue at the cable unit by 6%, which the company attributed to higher ratings and pricing at Fox News. Overall revenues at the cable networks division were up 10% to $3.89 billion.
Though he was not explicitly asked about the Ailes situation, Murdoch made it clear that he did not think the Fox News chief’s exit would impact the future of the business.
“The channel is just as strong as it’s ever been,” he said, adding, “There’s no real change in strategy.”
Fox’s television division saw revenues dip 1% to $1.04 billion on softer advertising spending. The company attributed that to excitement surrounding the Rio Olympics which were broadcast on NBC instead of Fox’s broadcasting channel.
The film business also underwent some major changes. Jim Gianopulos, the long-time studio chief, left the company at the end of the summer. He has been replaced by Stacey Snider, the former head of DreamWorks who had been serving as co-chair of the studio alongside Gianopulos. The filmed entertainment segment saw revenues increase more than 5% to $1.91 billion. The company attributed the lift to the release of “Independence Day: Resurgence,” which was something of a box office disappointment, as well as the home entertainment performance of “Deadpool,” its R-rated superhero smash. There was some addition by subtraction. Last year, Fox had to shoulder “The Fantastic Four,” a costly comic book adaptation that flopped.
The company’s share price closed Wednesday down 1.68% at $25.75.