(Reuters) - Rupert Murdoch’s newly separated 21st Century Fox reported higher revenue and profit because of growth at its cable operations including Fox News and its regional sports networks.
Investors had been waiting for years for Murdoch to split News Corp, giving its cable, movie and equity stakes in pay-TV assets their own spotlight away from the publishing division.
“Although a significant amount of time and effort was spent over the past 12 months on this separation, we never lost focus on the operation of our businesses,” Murdoch, who serves as chairman and CEO of Fox, said in a statement.
The entertainment properties are now known as 21st Century Fox while the publishing company - which includes The Wall Street Journal and The Times of London, book publisher HarperCollins, the education company Amplify, and pay-TV services in Australia - keeps the News Corp name.
Fox’s stable of cable networks including the Fox News Channel, FX Networks and National Geographic channels, said quarterly operating income before depreciation and amortization (OIBDA) soared 25 percent to $1.8 billion on higher affiliate fees and advertising revenue.
Fox executives said the company’s cable networks account for two-thirds of total earnings before interest, taxes, depreciation and amortization (EBITDA).
Fox is growing its cable franchise and plans to invest $200 million next year. It is launching new channels including Fox Sports 1 this month, a competitor to Walt Disney Co’s ESPN, and a new channel FXX aimed at young adults.
At its movie studio 20th Century Fox, OIBDA fell to $117 million from $140 million on lower contributions from its TV production studios that offset revenues from the new season of Netflix’s “Arrested Development.”
Its broadcast TV station Fox is still dogged by lower ratings for its show “American Idol” that dragged down advertising revenue 7 percent and segment OIBDA to $213 million from $235 million.
Total revenue rose 16 percent to $7.2 billion for the quarter ending June, compared with the same quarter last year, the company said on Tuesday.
Net income was $977 million, or 42 cents per share, from $596 million, or 25 cents per share, in the same quarter last year.
Adjusted for special items including gains from its equity stakes, the company reported EPS of 31 cents per share compared with analysts’ average expectation of 34 cents per share, according to Thomson Reuters I/B/E/S.
Shares of 21st Century Fox rose 1.5 percent in after-market trading following its regular session close at $31.23 on Tuesday.
Reporting by Jennifer Saba in New York; Editing by Ken Wills; Editing by Bernard Orr