Fox Raises Dividend & Stock Buybacks As It Tops Earnings Expectations

Fox shares are up in post-market trading as it ended its fiscal year with a gift to shareholders: The company raised its annual dividend by 6 cents a share and added $3 billion to its stock-buyback effort.

The announcements were tied to a stronger-than-expected earnings report for the June quarter. Net income to Fox shareholders jumped to $567 million from $87 million in the period last year on revenues of $6.65 billion, up 7.1%.

The top line is a little short of Wall Street’s forecast of $6.68 billion, but adjusted earnings at 45 cents a share were well ahead of expectations for 37 cents.

Executive chairmen Rupert and Lachlan Murdoch credited “gains in affiliate and advertising revenues despite considerable foreign exchange headwinds and difficult film comparisons.”

They add that Fox networks “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.”

At the main Cable Network Programming unit revenues increased 9.9% to $3.9 billion with its preferred profit measure — Operating Income Before Depreciation and Amortization (OIBDA) — flat at $1.2 billion.

Domestic affiliate revenues were up 6%, in par due to growth from FS1, FX, and Fox News Channel. U.S. ad sales improved 13%. But the strong U.S. dollar slammed overseas results.

The Television operation that includes the Fox broadcast network saw a 5.5% increase in revenues to $1.04 billion, with OIBDA up 27.4% to $144 million. The company redits a 5% increase in retransmission consent revenues and 9% jump in ad sales at Fox — partially offset by a drop in sports ad sales with the absense of the FIFA Women’s World Cup.

The Filmed Entertainment unit struggled with revenues up 6.9% to $2.0 billion but OIBDA down 39% to $164 million. Fox says that it faced higher theatrical releasing costs for X-Men: Apocalypse, Independence Day: Resurgence, Mike And Dave Need Wedding Dates, and Ice Age: Collision Course.

CEO James Murdoch told analysts he’s optimistic about upcoming releases, but acknowledged that Fox is “starting the year with a bit of a hill to climb.”

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