Affiliate Growth Drives Fox Earnings

Net income for the third quarter was $1.04 billion compared to $768 million from the previous year.

Fox reported revenues across its segments as:

• $3.23 billion in Cable Network Programming
• $1.05 billion in Television
• $2.48 billion in Filmed Entertainment
• $1.45 billion in Direct Broadcast Satellite Television
• -$317 million in Other, Corporate and Eliminations

Domestic affiliate revenue grew 18% in the Cable Network segment, reflecting a sustained growth of regional sports networks, FX networks and Fox News Channel. The international affiliate revenue increased 8% driven by strong local currency growth at Fox International Channels but partially offset by a strengthening the U.S. dollar in Latin America.

On August 5, the board of directors authorized the repurchase of an additional $6 billion in Class A Common Stock. This is expected to be carried out by August of 2015, the remaining amount under the company’s repurchase program at the end of September 2014 was approximately $5.2 billion.

Rupert Murdoch, Chairman and CEO of Fox, said:

Our strong earnings and revenue growth in the quarter were driven by continued momentum at our Cable Network Programming and Filmed Entertainment segments, reflecting sustained increases in affiliate fees as well as the global box office success of Dawn of the Planet of the Apes and The Fault in Our Stars. Additionally, we continued our focus on driving long-term value through our planned investments in a number of our growing brands, most notably our new channels FXX, Fox Sports 1 and STAR Sports.

FBR Capital Markets reiterated an Outperform rating for Fox but lowered its price target to $43 from $44, on October 31.

Citigroup reiterated a Buy rating for Fox and raised its price target to $41 from $37, on September 22.

Shares of Fox closed Tuesday down about 3% at $33.33. Following the release of the earnings report, the initial response in the post market was positive and shares were up over 1% at $33.70.

The company’s stock has a consensus analyst price target of $40.18 and a 52-week trading range of $30.67 to $36.56. It has a market cap of $72 billion.

ALSO READ: Will Mobile Sports Apps Team Up to Threaten Pay TV?