Fox beats the street with Deadpool’s help Michelle Clancy
| 07 May 2016
Saved by a superhero: Twenty-First Century Fox has reported quarterly earnings in line with Wall Street expectations, thanks to the box-office hit Deadpool and with its TV business doing well also.
deadpoolOverall, the house that Rupert built reported a better-than-expected 5.7% rise in adjusted revenue for the quarter that ended in March. Excluding items, the company earned 47 cents per share, so revenue (excluding the sale of Fox's direct broadcast satellite TV businesses) rose to $7.23 billion from $6.84 billion in its fiscal third quarter. Analysts on average had expected revenue of $7.18 billion.
That said, net income fell to $841 million, or 44 cents per share, from $975 million, or 46 cents per share, a year earlier.
Undoubtedly, the big bright spot in the quarter was the love that global audiences gave the quirky and irreverent Marvel Comics film, Deadpool. It brought in more than $760 million at the box office, making it the highest-grossing R-rated movie in history. The unit's operating income before depreciation and amortisation rose 23% to $470 million from a year earlier.
The company's cable channels, including Fox News Channel and FX, also brought in higher affiliate fees and ad revenue. That division accounts for more than half of Fox's total revenue, and it rose nearly 10% to $3.94 billion in the quarter.
Domestic advertising sales in the cable business rose 17% in the period, while overall television revenue increased 5% to $1.3 billion.
The race for the White House and the antics of Republican front-runner Donald Trump have been a windfall for Fox News, whose total day and primetime ratings topped all US basic cable channels from January through March, the first time in the network's history that has happened, according to Nielsen. The network averaged an impressive 1.4 million total-day viewers over the quarter, and 2.4 million primetime viewers.
Meanwhile, on the digital front, CEO James Murdoch confirmed on the earnings call that the company is in talks to supply programming for Hulu’s ‘skinny TV’ live streaming service.
The move would make the streamer a competitor to traditional pay-TV providers and other new digital entrants, especially Sling TV, which recently added Fox fare to its streaming line-up.
Fox management seemed unconcerned with cannibalisation, however. "We want to make our programming more available, not less," Murdoch said.
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