UPDATE: It’s been three years since Rupert Murdoch last showed up for his company’s quarterly call with analysts — but he made it today to underscore his faith in Fox after it withdrew its $80B offer for Time Warner. “We viewed it as a unique opportunity with clear strategic benefits,” the CEO said. Fox walked away from a deal due to Time Warner‘s “refusal to engage with us coupled with the reaction in share price that undervalued our stock. … This is our resolute decision.” He said Fox is “an amazing company, and our future has never been brighter.” It also has “a clear sense of where we are going.” Prodded about his eagerness to expand, Murdoch said that “all of our best businesses, we’ve built them ourselves. … We have no plan to go out on the acquisition trail.”
COO Chase Carey reinforced Murdoch’s comments about Time Warner. “Let me be clear: We are done.” If Fox increased its $85 a share cash-and-nonvoting-stock offer, then “too much of the value [would have gone to] Time Warner shareholders.” What’s more, “we have no plans to pursue any other third-party content company. … One of the most important traits that distinguishes us from our peers is that we are a growth company.” He added, in response to a question, that while “we have moved on,” Fox was attracted to Time Warner to give it scale, opportunities to “mix and match the assets” including overseas, and develop next-generation services. “In many ways our businesses look pretty similar. …We have a leadership position in scale,. This would have taken it to another level.” Even so, “we like the hand we’ve got.”
PREVIOUS, 1:13 PM: The solid June quarter performance may, in a small way at least, reassure Fox investors that they’ll be fine without an $80B acquisition of Time Warner that they didn’t really want. The entertainment company reported net income of $999M, up from a $371M loss in the quarter last year, on revenues of $8.42B, +16.8%. The revenue number beat Street forecasts for about $8.B. Not including one-time items, earnings at 42 cents a share topped the consensus prediction of 38 cents.
CEO Rupert Murdoch attributed the gains to the increase in pay TV revenues as well as films X-Men: Days Of Future Past, Rio 2 and The Fault In Our Stars. He says that has “confidence in our ability to execute our growth plan and drive value for our shareholders.” The $6B stock-repurchase authorization announced last night “further underscores our disciplined approach to increasing shareholder value.”
Revenues at the main cable network programming business increased 13% to $3.35B, with cash flow +11.4% ti $1.2B. Affiliate revenues were up 19% with help from regional sports networks — now including the New York Yankees’ YES — FX and Fox News. Domestic ad sales improved 12%, while overseas sales increased 5% after factoring in a 10% decline due to the strong dollar.
Poor ratings including American Idol weighed on television, which includes Fox Broadcasting. Cash flow fell 31.9% to $145M on revenues of $1.0M, -5.9%. But filmed entertainment more than held its own with cash flow +190% to $339M on revenues of $2.8B, +37.7%.