21st Century Fox Reports Full Year Income

Twenty-First Century Fox reported financial results for the three months and full year ended June 30, 2016.

Commenting on the results, Executive Chairmen Rupert and Lachlan Murdoch said:

“We delivered full-year revenue and earnings growth on the strength of gains in affiliate and advertising revenues despite considerable foreign exchange headwinds and difficult film comparisons. The value created by our multi-year investment in our content production and our global video brands is clear. Our brands are an indispensable part of any consumer offering, whether from a traditional distributor or a new entrant like Hulu’s upcoming live and on-demand service, which will benefit greatly from Time Warner’s investment and participation. The work we did this year bolsters our strong position in a world of growing demand and access to the premium content that consistently sets us apart.”

Full Year Company Results

The Company reported annual income from continuing operations attributable to stockholders of $2.76 billion ($1.42 per share), compared with $8.37 billion ($3.93 per share) in the prior year. Excluding the net income effects of Other, net, including the gain on the Company’s sale of the Direct Broadcast Satellite Television (“DBS”) businesses, Sky Italia and Sky Deutschland AG, to Sky plc (“Sky”) in the prior year, gains and other adjustments related to Sky and Endemol Shine Group included in Equity results and tax provision effects, adjusted annual earnings per share from continuing operations attributable to stockholders1 was $1.73 compared to the adjusted year-ago result of $1.72.

The Company reported annual revenues of $27.33 billion, an increase of $374 million, or 1%, from the $26.95 billion of adjusted revenues2 reported in the prior year. This revenue growth reflects higher affiliate and advertising revenues at both the Cable Network Programming and Television segments partially offset by lower home entertainment and theatrical revenues at the Filmed Entertainment segment. The adverse impact of foreign exchange rates impacted annual adjusted revenue growth by $727 million, or 3% in total.

The Company reported annual total segment operating income before depreciation and amortization (“OIBDA”)3 of $6.60 billion, which was $109 million, or 2%, higher than the adjusted OIBDA4 reported in the prior year. The OIBDA growth was driven by higher contributions from the Company’s Cable Network Programming and Television segments partially offset by expected lower contributions from the Filmed Entertainment segment. The adverse impact of foreign exchange rates impacted annual adjusted OIBDA growth by $381 million, or 6% in total.

Fourth Quarter Company Results

The Company reported quarterly income from continuing operations attributable to stockholders of $567 million ($0.30 per share), as compared to $116 million ($0.06 per share) reported in the corresponding period of the prior year. Excluding the net income effects of Other, net and adjustments to Equity losses of affiliates, including adjustments related to Sky and Endemol Shine Group and tax provision effects, fourth quarter adjusted earnings per share was $0.45 versus adjusted earnings per share of $0.39 in the same quarter of the prior year. Current quarter adjusted earnings per share includes a tax benefit of $0.07 per share from the receipt of a favorable tax ruling.

The Company reported quarterly revenues of $6.65 billion, a $441 million, or 7%, increase from the $6.21 billion of revenues reported in the prior year quarter. This increase primarily reflects higher affiliate and advertising revenues generated at our Cable Network Programming and Television segments and higher content revenues generated at the Filmed Entertainment segment. The adverse impact of foreign exchange rates impacted quarterly revenue growth by $116 million, or 2% in total.

Quarterly total segment OIBDA of $1.45 billion declined by $93 million from the $1.54 billion reported in the prior year quarter. This decrease was due to expected lower contributions from the Filmed Entertainment segment partially offset by higher contributions at the Television segment. The adverse impact of foreign exchange rates impacted quarterly OIBDA growth by $53 million, or 3% in total.