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UPDATE 2-Fox profit beats estimates on Super Bowl, cable growth
May 7, 2014 / 9:07 PM / in 3 years

UPDATE 2-Fox profit beats estimates on Super Bowl, cable growth

(Adds comment from Fox president on conference call)

By Abhirup Roy and Liana B. Baker

May 7 (Reuters) - Rupert Murdoch-controlled television and film company 21st Century Fox Inc reported a better-than-expected quarterly profit, helped by strong Super Bowl advertising and cable network growth.

Excluding special items, the company earned 47 cents per share, handily beating the average Wall Street estimate of 35 cents, according to Thomson Reuters I/B/E/S.

Revenue rose to $8.22 billion from $7.35 billion.

Shares in Fox, which separated from News Corp in June, rose 4 percent to $33.50 in extended trading on Wednesday.

Chase Carey, Fox’s president and chief operating officer, hinted on a conference call with analysts that he was close to renewing his contract with Fox. Carey’s contract is up for renewal on June 30 and investors are wondering whether he will stay.

At the end of March, Murdoch returned eldest son Lachlan to the leadership of his media empire and promoted younger son James, paving the way for the 83-year-old tycoon’s succession plan. James reports to Carey, who is a well respected operator.

Carey said on the conference call on Wednesday, “Rupert and I have an understanding and a new agreement. We’ve simply not gotten it on paper yet.”

Advertising revenue in Fox’s television business rose 30 percent in the quarter, helped by advertising during Super Bowl XLVIII and the National Football League playoffs.

The Super Bowl is rotated yearly across different broadcast networks.

“They overdelivered on television which Disney just missed out, so that was a good fact,” Needham & Co analyst Laura Martin said.

Fox reported a 27 percent rise in TV revenue to $1.59 billion, while Disney on Tuesday blamed a decrease in primetime advertising for flat broadcast revenue of $1.50 billion.

Revenue at Fox’s cable networks, its largest business, grew 11.5 percent to $3.15 billion, driven mainly by a 12 percent rise in domestic affiliate revenue.

Fox’s stable of cable networks includes the Fox News Channel, Fox Sports, FX Networks, National Geographic channels and a new channel FXX aimed at young adults.

Expenses rose 12 percent in the business as the company invests heavily on sports channels, going after Walt Disney Co’s ESPN with its Fox Sports 1 channel launched in August.

Net income was $1.05 billion, or 47 cents per share, for the third quarter ended March 31, compared to net income a year ago of $2.89 billion, or $1.22 per share. The prior-year period included a $2.1 billion accounting gain as the company increased its stake in British Sky Broadcasting. (Reporting by Abhirup Roy, Sruthi Ramakrishnan in Bangalore and Liana B. Baker in New York; Editing by Joyjeet Das and Cynthia Osterman)

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