Fox earnings miss forecasts after cable investments

Tue Nov 5, 2013 6:29pm EST
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By Lisa Richwine

LOS ANGELES (Reuters) - Rupert Murdoch's 21st Century Fox Inc (FOXA.O: Quote) TV and film company reported quarterly earnings on Tuesday that missed Wall Street expectations, hurt by investments in new cable channels and a weaker performance from its movie releases.

Fox shares dropped 2 percent in after-hours trading to $33.40, down from their $34.09 close on Nasdaq.

Fox posted adjusted earnings-per-share of 33 cents for the quarter that ended in September, down from 38 cents a year earlier. Wall Street analysts had forecast 35 cents per share on average, according to Thomson Reuters I/B/E/S.

In June, News Corp split its publishing and entertainment businesses, with the film and TV units forming the new 21st Century Fox.

For its first quarter as a separate company, Fox recorded total revenue of $7.06 billion, an 18 percent increase from the same period a year earlier.

But net income dropped as Fox invested in Fox Sports 1, a competitor to Walt Disney Co's (DIS.N: Quote) ESPN that launched in August, and FXX, a channel aimed at young adults that made its debut in September.

Quarterly income from continuing operations slumped to $768 million, down from $2.3 billion a year earlier. The previous year's quarter included $1.4 billion from an asset sale.

"The investment we are making, including the launch of FXX and Fox Sports 1, will drive future sustained growth," Murdoch said in a statement.   Continued...

Rupert Murdoch, News Corp. and 21st Century Fox CEO, speaks during the annual Lowy Lecture at the Sydney Town Hall October 31, 2013. REUTERS/David Gray