Fox says dollar, shifting viewers to weigh on 2016 profit
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...