21st Century Fox reported a gain in second quarter profits on proceeds from the sale of its direct broadcast satellite businesses and strong results from its cable networks.
The company said second quarter income from continuing operation was $6.22 billion, or $2.89 per share, up from $982 million, or 43 cents per share. That includes a $5.04 billion gain on the sale of Sky Italia and Sky Deutschland. Excluding that gain, and gains from the sales of stakes in National Geographic Channels International and ITV, adjusted earnings per share were 53 cents versus 33 cents a year ago.
Revenues were $8.06 billion including $631 million in revenues from direct broadcast operations that were sold. The company said that excluding DBS revenue, adjusted revenues were up 10% to $7.42 billion.
The company said that for the full year, earning growth would be lower than expected because of a stronger than expected dollar and weak ratings and ad revenues at the Fox broadcast networks.
COO Chase Carey said that the majority of 21st Century Fox’s businesses are “on track and our competitive position is as strong as ever.” But he said the broadcast business “is not where we expected it to be at this time” because of the continuing migration of viewership to digital platforms and the lack of a rebound in the ad market.
Operating income rose 12% to $121 million in Fox’s cable network programming business despite continued investment in its new sports channels.
Domestic advertising revenue grew 11% driven by increases at FX Networks, Fox News Channel and Fox Sports 1. Domestic affiliate revenue grew 19%. Domestic operating income rose 13%.
At Fox’s television segment, which includes the Fox Broadcast Network, operating income rose 33% to $290 million. The cancellation of X-Factor and the absence of Glee meant lower programming costs at Fox Broadcasting despite higher payments to the National Football League. Revenues were flat as strong growth in retransmission payments were offset by a 3% drop in ad revenues. The drop in ad revenue was caused by lower ratings at the network and offset gains in political advertising at the Fox stations.