Update: 21st Century Fox Beats On Earnings

| About: Twenty-First Century (FOXA)

Summary

21st Century Fox reported fourth quarter revenue growth of 17% to $8.42 billion and net income of $999 million compared to -$371 million in 4Q2013.

The Filmed Entertainment segment was the biggest driver of revenue growth with a 38% year-over-year increase to $2.8 billion.

My original article outlined how the strength in Fox's movie studio this quarter and continuing through the rest of 2014 would drive revenue growth for the company.

21st Century Fox (NASDAQ:FOXA) reported fourth quarter revenue growth of 17% to $8.42 billion over the prior year quarter and net income of $999 million compared to -$371 million in the prior year quarter. Revenue came in well ahead of the analysts' consensus of $7.99 billion and on an adjusted basis EPS beat analysts' expectations by $0.04. Cable network programming revenue increased 13% and the filmed entertainment division increased by 38% over 4Q2013. Success in the filmed entertainment division was led by successful movies, such as X-Men: Days of Future Past, Rio 2 and The Fault In Our Stars. Fox's movie studio became the first to pass $1 billion in domestic box office sales, as well as $3 billion in total worldwide box office sales.

During the conference call, Rupert Murdoch made a rare appearance to speak to the decision to pull the buy-out offer for Time Warner, due to unsuccessful negotiations with the Time Warner board of directors and the resulting fall in 21st Century Fox's share price. Murdoch went on to acknowledge the company will no longer pursue the acquisition of any media content companies and instead focus on organic growth within the company. The company also announced a new $6 billion share buyback program to be completed over the next 12 months. This aggressive buyback has the potential to remove more than 10% of outstanding shares.

In my original article, "21st Century Fox's Movie Studio Is Making Waves", I laid out how a tremendously successful FY 4Q2014 for the company's movie studio would propel revenue forward and would result in beating analysts' expectations. Weak comparisons going forward in the filmed entertainment division set up the company for continued revenue increases during the back half of 2014. The stock increased over 3% in after-hours trading. Look for continued revenue growth from the company over the next 2 quarters.

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