21st Century Fox reported a big increase in second-quarter profits because of the sale of its stake in Sky.
As the company prepares to sell itself to the Walt Disney Co. and spin off its broadcast, sports and news assets to the new Fox, it posted a 6% increase in revenue to $8.5 billion.
Net income jumped to $10.8 billion, or $5.80 a share, compared to $1.831 billion, or 99 cents a share a year ago.
Excluding the effects of the Sky sale to Comcast, segment operating income (OIBDA) was up 9% to $1.57 billion.
Fox’s cable network programming segment’s operating income rose 7% to $1.453 billion from $1.365 billion. Revenue increased 4% to $4.562 billion from $4.405 billion.
Domestic cable revenue increased 7%. Domestic affiliate revenue increased 8% and domestic ad revenue was up 6%, mostly due to higher prices at Fox News, the company said. Profits were higher at Fox News and the regional sports networks.
The television segment posted a $22 million loss compared to a $56 million profit a year ago. Revenue was $2.148 billion, up 19% from $1.806 billion.
Ad revenue was up 15% because of Fox Broadcasting adding Thursday Night Football. But the Thursday Night Football also contributed to a 24% rise in expenses. Political advertising at Fox’s stations also increased. Affiliate revenue, mainly from retransmission consent fees, were up 21%.
Fox’s movie business showed a 47% increase in operating income.
The company booked a $115 million loss on its 30% share of Hulu in the quarter, up from a $108 million lass a year ago. Fox’s Hulu stake will be owned by Disney after the deal closes.
“Our Company delivered another strong quarter of financial results, underpinned by distribution and advertising revenue increases at our domestic cable networks and broadcast businesses and the substantial gain on our sale of Sky,” said executive chairmen Rupert and Lachlan Murdoch.
“These results reflect our continued commitment to excellence in all aspects of our business. There has also been significant progress regarding the transaction with Disney and the spin-off of Fox Corporation including the effectiveness of the Form 10. Lastly, it is a fitting tribute that our film and television production businesses were recently recognized with industry leading Golden Globe wins and Academy Award nominations,” they said. “Our achievements, including the value we have delivered for shareholders, are a credit to all our talented colleagues. Thanks to their hard work, we have created durable businesses for the long term, and strong momentum as we near the creation of Fox Corporation and the combination with Disney.”