Channel launches hurt 21st Century Fox profit

By Ryan Nakashima, AP

LOS ANGELES–Entertainment giant Twenty-First Century Fox Inc. on Tuesday said that investments in new channels, including the launch of Fox Sports 1 and FXX in the U.S., hurt its profit in its fiscal first quarter.

The results marked the first quarter as a separate entity from publishing company News Corp., which was spun off at the end of June. Both entities remain controlled by Rupert Murdoch, who is CEO of 21st Century Fox and executive chairman of News Corp.

Net income for the three months through Sept. 30 was US$1.26 billion, or 54 cents per share. That compared with US$2.23 billion, or 94 cents per share, a year ago, when the company benefited from the sale of its stake in TV software company NDS Group.

Excluding discontinued operations, adjusted earnings came to 33 cents per share, a penny short of the forecast of analysts polled by FactSet.

Revenue rose 18 percent to US$7.06 billion, helped by better-than-expected growth from its TV businesses at home and abroad. Wall Street expected US$6.82 billion.

A lot of the revenue gain came from including the results of German satellite TV operator Sky Deutschland, in which the company took a majority stake in January. That lifted direct broadcast satellite TV revenue 68 percent to US$1.39 billion.

Pay TV revenue from its networks like Fox News Channel and FX grew 12 percent to US$2.81 billion, thanks to rising fees from distributors and ad revenue growth in the U.S. and overseas.

Studio revenue grew 9 percent to US$2.12 billion, partly because of the sales of TV shows, such as the first two seasons of “New Girl” to online streaming leader Netflix. But the segment wasn’t as profitable as a year ago as box office from movies like “The Wolverine” and “The Heat” paled in comparison to last year’s blockbuster “Ice Age: Continental Drift.”