By Lisa Richwine
LOS ANGELES Nov 5 Rupert Murdoch's 21st Century
Fox Inc TV and film company reported quarterly earnings
on Tuesday that missed Wall Street expectations, hurt by
investments in new cable channels and a weaker performance from
its movie releases.
Fox shares dropped 2 percent in after-hours trading to
$33.40, down from their $34.09 close on Nasdaq.
Fox posted adjusted earnings-per-share of 33 cents for the
quarter that ended in September, down from 38 cents a year
earlier. Wall Street analysts had forecast 35 cents per share on
average, according to Thomson Reuters I/B/E/S.
In June, News Corp split its publishing and entertainment
businesses, with the film and TV units forming the new 21st
For its first quarter as a separate company, Fox recorded
total revenue of $7.06 billion, an 18 percent increase from the
same period a year earlier.
But net income dropped as Fox invested in Fox Sports 1, a
competitor to Walt Disney Co's ESPN that launched in
August, and FXX, a channel aimed at young adults that made its
debut in September.
Quarterly income from continuing operations slumped to $768
million, down from $2.3 billion a year earlier. The previous
year's quarter included $1.4 billion from an asset sale.
"The investment we are making, including the launch of FXX
and Fox Sports 1, will drive future sustained growth," Murdoch
said in a statement.
At the cable networks unit, operating income before
depreciation and amortization, a measure of profit, fell to $991
million from $1.0 billion a year earlier. Morningstar analyst
Michael Corty said the decline in the cable networks business
was not surprising given the launch of the new sports channel.
"Overall, I thought the results were solid," he said.
At the film division, OIBDA dropped to $328 million from
$433 million a year earlier. The studio's releases included
big-budget action movie "The Wolverine" and female buddy comedy
"The Heat." Those films could not match the success a year
earlier of animated blockbuster "Ice Age: Continental Drift."
Fox Chief Operating Officer Chase Carey, on a conference
call with analysts, said the company was on track to repurchase
the $4 million in Class A shares this year that it announced on
Carey said it was unlikely Fox would be in the market to buy
"We're always opportunistic, but we're pretty pleased with
our group," he added.