Fox posts strong quarterly earnings despite Roger Ailes scandal
21st Century Fox delivered a healthy fiscal first quarter with earnings for the July-through-September period driven higher primarily by a strong performance in its TV portfolio, which includes the Fox News and FX cable channels.
The company posted healthy results despite negative publicity during the period stemming from the sexual harassment scandal involving Roger Ailes at its Fox News division. Ailes, who was the cable news channel’s longtime chairman, stepped down in July after anchor Gretchen Carlson accused him of professional retaliation after she spurned his sexual advances.
21st Century Fox posted fiscal first-quarter earnings of 44 cents per share, or $827 million, up from 34 cents, or $678 million, in the same period last year. Revenue rose 7% to $6.51 billion, from $6.08 billion in the year-ago period.
Adjusted earnings was 51 cents per share, versus 38 cents in the same quarter last year. Analysts were expecting earnings of 44 cents per share.
The company attributed the jump in revenue to higher affiliate and advertising revenues generated at its cable channels, especially Fox News.
Fox News “is as strong as it has ever been,” James Murdoch, chief executive of 21st Century Fox, said in a call with analysts Wednesday. He alluded indirectly to the Ailes resignation, saying that the leadership change is “nothing that would change the trajectory or course” of the channel.
Murdoch said that Fox News has benefited from the presidential campaign but added that ratings will probably come down after the Nov. 8 election. Republican presidential nominee Donald Trump has been a frequent guest on Fox News’ “Sean Hannity Show.”
The company’s 20th Century Fox film studio saw revenue rise by nearly 7% to $1.91 billion, compared with $1.8 billion in the year-earlier period, despite the domestic disappointment of “Independence Day: Resurgence.”
The science fiction movie, which is a sequel to the 1996 film, was released in late June and underperformed domestically, bringing in $103.1 million on a production budget of about $165 million.
But the movie fared better overseas, with a total global tally of close to $390 million.
The company said it also benefited from the release of “Deadpool” on home video and digital, as well as the video-on-demand licensing of the drama series “Homeland” to Hulu LLC.
In recent months, James Murdoch and his brother Lachlan have taken a more active role in overseeing the Los Angeles studio. In June, the brothers tapped Stacey Snider to replace Jim Gianopulos as Fox studio chief. Lachlan Murdoch serves as an executive chairman of 21st Century Fox.
Revenue at the company’s cable TV business rose to $3.81 billion for the quarter from $3.46 billion a year earlier. Its television division saw revenue dip slightly to $1.04 billion from $1.05 billion.
The FX channel has experienced a string of popular and critical hits in recent months, including the miniseries “The People v. O.J. Simpson: American Crime Story,” which won nine Emmy Awards in September. The new series “Atlanta” debuted in September to strong ratings.
James Murdoch signaled Wednesday that Fox is in no rush to find a merger partner in the wake of the AT&T-Time Warner deal. The industry “thrives on scale. But scale of scale’s sake is not something that should be pursued,” he said on the call.
4:40 p.m.: This article was updated with adjusted earnings information.
3:15 p.m.: This article was updated with information from the call with analysts.
This article was originally published at 2 p.m.
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