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Sky Sale, ‘Bohemian Rhapsody’ Lift 21st Century Fox Earnings

Revenues and profits climbed at 21st Century Fox during its most recent financial quarter, even as the company behind “The Simpsons,” “Avatar,” and “The Ingraham Angle” prepares to be sold off or reconstituted.

Quarterly income for the three-month period ending in December hit $10.83 billion or $5.81 per share compared to $1.84 billion or 99 cents per share, a huge jump that was attributable to the company’s sale of its investment in European pay-TV giant Sky. When the money from the Sky sale was taken out of the picture, things didn’t look as rosy. Adjusted quarterly earnings per share were 37 cents, 12% lower than the 42 cents in adjusted earnings reported in the prior-year quarter. That dip in earnings were largely due to the loss of Sky as a source of profits. So Sky giveth and it taketh away.

Revenues of $8.50 billion represented a 6% increase from the $8.04 billion reported in the prior year quarter, which the company said was due to higher advertising revenues and affiliate fees, as well as the box office success of the Freddie Mercury biopic “Bohemian Rhapsody.” Wall Street had projected earnings per-share of 33 cents, an estimate that Fox beat. Analysts had also predicted revenue of $8.50 billion, a figure that Fox matched.

Operating income at Fox’s film division climbed 47% to $193 million, which was almost entirely attributable to the popularity of the Oscar-nominated “Bohemian Rhapsody,” and the cable unit saw operating income climb 7% to $1.45 billion. Higher sports programming costs took a chunk out of the television unit’s profits, sending the division to a loss of $22 million.

The report comes as much of Fox is bracing itself to be absorbed by the Walt Disney Company in a $71.3 billion mega-deal. After the acquisition is finalized, 20th Century Fox, FX, Nat Geo, and other properties will be part of the Disney empire. That will leave Fox broadcasting, Fox News, and a few other channels to be reconfigured into a new entity that will be led by Rupert Murdoch and his son Lachlan Murdoch.

In September, Fox announced it would sell its stake in Sky after it lost out in a bidding war with Comcast for full ownership of the U.K.-based broadcaster.

Disney reported earnings Tuesday. The media conglomerate had a more robust financial picture than expected even though its earnings dipped and revenue remained essentially flat. In a call with analysts, Disney CEO and chairman Bob Iger predicted that the combined companies will become the “world’s premiere global entertainment company.” Due to the pending merger, Fox will not hold a conference call for investors following its earnings report.

The deal with Disney still needs final regulatory approval. Fox said it expected that the final sign-off will come in the first half of 2019, but insiders say that the sale could close at the end of February.

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