August 6, 2015 / 12:06 AM / 4 years ago

Fox lowers profit outlook, shares drop

(Reuters) - Media company Twenty-First Century Fox Inc (FOXA.O) on Wednesday reduced its profit expectation for the coming year, citing foreign currency impacts, the timing of film releases, and sports and digital investments in India.

People are reflected on a poster of Fox at the Twenty-First Century Fox Inc headquarters in the Manhattan borough in New York June 11, 2015. REUTERS/Eduardo Munoz

Fox had projected earnings in the mid-$7 billion range for the 12 months through June 2016. Its shares fell about 5 percent to $30.50 in after-hours trading.

Earnings before interest, taxes, depreciation and amortization (EBITDA) are projected to grow in the mid-single digits above the $6.49 billion from the just-ended fiscal year, Chief Financial Officer John Nallen said on a conference call.

The growth will be driven by cable networks, Chief Executive Officer James Murdoch said. He said he expected older channels such as Fox News and FX to lose subscribers as the pay TV industry shrinks, but newer offerings including Fox Sports 1 and FXX should pick up customers.

“We have a high degree of confidence in achieving our earnings guidance,” Murdoch said.

James Murdoch took over from his father, Rupert, as CEO of Fox on July 1. His brother, Lachlan, was named executive co-chairman alongside Rupert.

Earlier, Fox reported a 9.3 percent fall in quarterly adjusted revenue as television advertising sales fell and a lack of major film releases weighed on its studio.

But Fox’s adjusted profit beat Wall Street expectations and the company said it would buy back $5 billion Class A shares over the next 12 months.

Adjusted revenue, which excluded the sale of the company’s direct broadcast satellite television businesses, fell to $6.21 billion. Analysts on average had expected revenue of $6.41 billion, according to Thomson Reuters I/B/E/S.

Revenue in Fox’s film studio fell by a third to $1.91 billion as no major titles released in the quarter.

At the cable network programming business, revenue rose 6.6 percent to $3.57 billion, boosted by coverage of NASCAR and ICC Cricket World Cup sporting events. The business accounts for more than half the company’s total revenue.

Domestic advertising sales rose 4 percent, helped by double-digit growth in its sports channels including Star Sports and Fox Sports 1.

Excluding items, the company earned 39 cents per share in the fourth quarter ended June 30, beating the average analyst estimate of 37 cents, according to Thomson Reuters I/B/E/S.

Reporting by Anya George Tharakan in Bengaluru; Editing by Sayantani Ghosh, Bernard Orr

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