NEW YORK (Reuters) – Media company Fox Corp (FOXA.O) reported quarterly results that beat Wall Street estimates on Wednesday, boosted by higher fees collected from cable and satellite operators and online distributors.
FILE PHOTO: Lachlan Murdoch, co-chairman and chief executive officer of Fox Corp., attends the annual Allen and Co. Sun Valley media conference in Sun Valley, Idaho, U.S., July 11, 2019. REUTERS/Brendan McDermid/File Photo
The company said its adjusted profit for the quarter was 62 cents per share, beating analysts’ estimates by 3 cents, according to IBES data from Refinitiv.
Revenue, which rose nearly 5% to $2.51 billion in the quarter, also beat Wall Street expectations of $2.47 billion.
Rupert Murdoch’s newly spun-off Fox Corp debuted on the Nasdaq in March following the $71 billion sale of Twenty-First Century Fox’s film and television assets to Walt Disney Co (DIS.N).
It emerged a leaner, more nimble company seeking to build on its concentration of live news and sports, including World Wrestling Entertainment Inc (WWE.N) and Super Bowl LIV next February.
Overall revenue growth in Fox’s fiscal fourth quarter was largely driven by a 7.4% increase in affiliate revenues, or the fees collected from cable and satellite operators and online distributors, to $1.41 billion.
Those increases were offset by a 6% decline in advertising revenues with fewer FIFA World Cup soccer matches, the company said. Sales in the broadcaster’s cable network programming business rose 2.2% to $1.3 billion.
On Tuesday, Fox Entertainment said it would buy animation studio Bento Box Entertainment, which produces hits including Bob’s Burgers. Financial terms were not disclosed.
Fox also said on Sunday it was spending $265 million for a 67% stake in Credible Labs Inc, an online consumer financial marketplace, and that it would invest up to another $75 million of growth capital over about two years.
In May, Fox spent more than $236 million for a nearly 5% percent equity stake in The Stars Group Inc (TSGI.TO) to build FOX Bet, a Fox-branded sports betting platform expected to launch this fall in U.S. states where sports wagering is legal.
The betting product is on track to launch before football season, said Chief Executive Officer Lachlan Murdoch during a call with analysts and investors on Wednesday.
Even last year before its spin-off had closed, Fox began pivoting into new companies. In September, it invested $100 million in new social broadcasting platform Caffeine TV and plans to launch a content studio jointly owned by Caffeine and FOX Sports.
Net income for the quarter fell to $454 million, or 73 cents per share, in the three months ended June 30, from $471 million, or 76 cents per share, a year earlier.
Reporting by Akanksha Rana in Bengaluru and Hilary Russ in New York; editing by Sriraj Kalluvila and Bill Berkrot