UPDATE 2-Fox earnings miss forecasts after cable investments
LOS ANGELES, Nov 5 (Reuters) - Rupert Murdoch's 21st Century Fox Inc TV and film company reported quarterly earnings that missed Wall Street expectations, dragged down by investments in new cable channels and a weaker performance by its movie slate.
For the quarter that ended in September, Fox posted adjusted earnings-per-share of 33 cents, down from 38 cents a year earlier, the company reported on Tuesday. Wall Street analysts on average had expected 35 cents per share, according to Thomson Reuters I/B/E/S.
Fox shares dropped 2 percent after hours to $33.40, down from their earlier $34.09 close on Nasdaq.
"They're a little weak, but nothing material," said Brett Harriss, an analyst with Gabelli & Company.
In June, News Corp separated into a publishing company and the TV and film unit that became Fox.
Fox recorded $7.06 billion of total revenue for the quarter, an 18 percent increase from the same period a year earlier.
Murdoch, in a statement, highlighted the revenue increases and a gain in OIBDA, operating income before depreciation and amortization.
"We delivered strong revenue increases across all of our businesses as well as growth in OIBDA even as we made significant investment in our channels business, and faced a difficult film comparison and currency headwinds," he said.
The company launched Fox Sports 1, a competitor to Walt Disney Co's ESPN, in August, and FXX, a channel aimed at young adults that debuted in September. At the cable networks unit, OIBDA fell to $991 million from $1.0 billion a year earlier.
Morningstar analyst Michael Corty said the decline in the cable networks business was not surprising given the launch of Fox Sports 1.
"Overall, I thought the results were solid," he said.
At the film studio, OIBDA dropped to $328 million from $433 million a year earlier. The studio releases included "The Wolverine" and "The Heat." Those films could not match the success a year earlier "Ice Age: Continental Drift."