Fox says dollar, shifting viewers to weigh on 2016 profit

Wed Feb 4, 2015 7:33pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Lehar Maan and Anya George Tharakan

(Reuters) - Twenty-First Century Fox Inc cut its profit forecast for the next financial year after the dollar strengthened and as more viewers and advertisers swap its broadcast networks for on-demand TV.

Shares of the company, helmed by media mogul Rupert Murdoch, fell 6 percent to $32.57 in extended trading on Wednesday.

Fox expects a profit in "the mid $7 billion range" for the financial year ending June 2016, Chief Operating Officer Chase Carey said after the company reported quarterly results. Fox had previously forecast 2016 profit of about $8 billion.

"We anticipate the industry trends impacting advertising will be slightly larger than previously expected, as both advertising and viewership continues to migrate to digital platforms," Carey said on a conference call with analysts.

Viewers have made drastic changes to the way they watch television, opting for on-demand content offered by Netflix Inc or Amazon.com Inc, which can be viewed on a array of devices from TVs to smartphones to tablets.

According to Trefis, a research company, ratings have been softer this season for scripted shows on Fox's broadcast network, such as supernatural drama "Sleepy Hollow" and "New Girl", a sitcom starring Zooey Deschanel.

Softer ratings will hit advertising revenues, a trend that is likely to be exacerbated by rising programming costs, Trefis said in a report published on Feb. 3. (bit.ly/1xkI2Fy)

Fox also joins a growing list of U.S. corporations to be hit by the strengthening of the dollar, which gained nearly 13 percent against a basket of currencies in 2014.   Continued...

 
Rupert Murdoch, Executive Chairman News Corp and Chairman and CEO 21st Century Fox speaks at the WSJD Live conference in Laguna Beach, California October 29, 2014.  REUTERS/Lucy Nicholson