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21st Century Fox Q3 operating income up
MUMBAI: US media conglomerate 21st Century Fox has reported financial results for the three months ended 31 March 2016.
The company reported total quarterly revenues of $7.23 billion, an increase of $388 million, or six per cent, from the $6.84 billion of revenues reported in the prior year. This revenue growth reflects higher affiliate and ad revenues at both the Cable Network Programming and Television segments, partially offset by lower television production revenues at the Film segment. The adverse impact of foreign exchange rates in the current quarter impacted revenue growth by $204 million, or three per cent in total.
Quarterly total segment operating income before depreciation and amortisation (OIBDA) of $1.88 billion increased $204 million, or 12 per cent, from the $1.68 billion of quarterly OIBDA reported in the prior year. The increase principally reflects double digit OIBDA growth at each of the company’s film and Cable Network Programming segments partially offset by lower contributions from the television segment. The adverse impact of foreign exchange rates impacted OIBDA growth by $110 million, or seven per cent.
The company reported quarterly income from continuing operations attributable to stockholders of $844 million ($0.44 per share), compared with $990 million ($0.47 per share) in the prior year. Excluding the net income effects of Other, net and gains and other adjustments related to Sky and Endemol Shine Group included in equity losses from affiliates, adjusted quarterly earnings per share from continuing operations attributable to stockholders was $0.47 compared with the adjusted
year-ago result of $0.42.
Cable Network Programmming: Quarterly segment OIBDA increased by 12 per cent to $1.38 billion driven by a 10 per cent revenue increase on higher affiliate revenues and low double digit ad revenue growth, partially offset by a nine per cent increase in expenses.
The increase in expenses was primarily due to higher entertainment programming and marketing costs at FX Networks and higher political coverage costs at Fox News, partially offset by lower sports rights costs at Star India due to the absence of the prior year broadcast of the ICC Cricket World Cup.
The Cable Network Programming segment third quarter results also included offsetting revenue and expenses related to the inclusion of results from the National Geographic non-channels businesses, which were acquired from the National Geographic Society in the second quarter. Foreign exchange fluctuations, primarily in Latin America and India, adversely impacted segment OIBDA growth by five per cent.
US affiliate revenue increased by seven per cent reflecting sustained growth at FX Networks and FS1. Domestic advertising revenue grew by 17 per cent over the prior year period reflecting higher ratings and pricing at Fox News and a higher number of National Basketball Association games played in the current quarter at the Regional Sports Networks as well as the impact from the consolidation of the National Geographic non-channels businesses. Domestic OIBDA contributions increased by seven per cent over the prior year led by higher contributions from FS1, Fox News and FX Networks.
International affiliate revenue increased by six per cent driven by strong local currency growth at the Star India and Fox Networks Group International (FNG International) channels, formally known as Fox International Channels, or Fic, which was partially offset by a negative 14 per cent impact from the strengthened dollar. International ad revenue increased by six per cent as local currency growth at the Star India and FNG International entertainment channels was partially offset by a negative 11 per cent impact from the strengthened US dollar.
Quarterly OIBDA at the international cable channels increased 67 per cent reflecting strong growth at the Star India channels due to both higher affiliate and ad revenues at the entertainment channels and lower rights costs at the sports channels due to the absence of the prior year broadcast of the ICC Cricket World Cup.
Executive chairmen Rupert, Lachlan Murdoch made a special mention of Star’s sports broadcasting business in India. “We delivered significant revenue and earnings growth in the quarter on the strength of gains in affiliate and advertising revenues across our domestic and international cable portfolios as well as at our television segment. Whether it was Fox News outranking all of basic cable for the first time, FX delivering the year’s most watched new cable show with ‘The People v. O.J. Simpson: American Crime Story’, or Star Sports remaking televised sports in India, the unique appeal of our industry leading brands and premium content has never been clearer. This strength extended to our film studio, which broke global box office records and expanded a global franchise with ‘Deadpool’, while delivering its second strongest quarterly earnings ever. The demonstrated value of our brands and our outstanding creative content will drive our businesses forward in both the existing and evolving media marketplace.”
Television: It generated quarterly segment OIBDA of $125 million, a $16 million decrease from the $141 million reported in the prior year quarter. Quarterly segment revenues were 5 per cent higher than the corresponding period in the prior year due to strong retransmission consent revenue growth and higher advertising revenues led by higher political spending at the TV stations. The decrease in segment OIBDA was driven by higher contractual sports programming costs at the FOX Broadcast Network that more than offset the higher revenues.
Film: This segment generated quarterly segment OIBDA of $470 million, an increase of $88 million, or 23 per cent, from the $382 million reported in the same period a year-ago. The OIBDA increase was driven by higher contributions from the film studio, led by the record-breaking worldwide theatrical release of ‘Deadpool’, which has grossed over $760 million in worldwide box office to date and is the top grossing R-rated movie ever, partially offset by lower television production results reflecting the absence of the network delivery of ‘Glee’, which aired its final season on Fox last year. Quarterly segment revenues decreased by $68 million to $2.32 billion, primarily reflecting lower worldwide home entertainment and television production revenues and a three per cent negative impact from foreign exchange rate fluctuations, partially offset by higher worldwide theatrical revenues, led by the theatrical release of ‘Deadpool’. Foreign exchange fluctuations adversely impacted segment OIBDA growth by 13 per cent.