Cable Nets Power FOX During Q2 2015

21st Century Fox Inc. on Wednesday reported better-than-expected fourth-quarter earnings and a new $5 billion stock-buyback program following the media company's recent leadership transition.

Fox's Class A Shares, down 17% in 2015, rose 0.3% to $32 in recent after-hours trading, according to Marketwatch.

In July, Rupert Murdoch officially stepped down as chief executive of 21st Century Fox Inc., handing the title to his son James, 42 years old. The elder Mr. Murdoch, who is 84, stayed on as executive chairman at Fox. His older son, Lachlan Murdoch, 43, was named executive co-chairman.

The moves formalized a transition that put Mr. Murdoch's children at the helm of Fox, a sprawling conglomerate that includes the Fox broadcast network, cable channels in the U.S. and around the world, and one of the largest film and television studio.

In the latest quarter, Fox's earnings were powered by its cable networks and a gain on its sale of satellite businesses, but total revenue declined because of declines in the filmed entertainment segment and the sale of the satellite businesses.

Revenue for cable network programming grew to $3.57 billion from $3.35 billion a year earlier. However, television revenue fell to $987 million from $1.03 billion, and revenue from filmed entertainment declined to $1.91 billion from $2.8 billion.

The company on Wednesday also reported a new $5 billion buyback program to be completed over the next 12 months. During the fourth quarter, Fox repurchased 34 million Class A shares for $1.16 billion, bringing the total fiscal year repurchase to 172 million Class A shares for $5.94 billion.

James and Lachlan Murdoch

James and Lachlan Murdoch tried to exude confidence on their first earnings call with investors after a generational management shift at 21st Century Fox that left them with key leadership roles.

Variety reports the backdrop was not advantageous. Investor concerns about a slowdown in the cable business resulted in a punishing day for media stocks. Time Warner stock fell nearly 9%, while Disney shares dropped more than 9% after the companies reported their quarterly numbers. Fox bested projections on the earnings front, but was not spared the bloodletting, closing the day down 6.7%.

Lachlan, who has been named co-chairman alongside his father Rupert Murdoch, and James, who is tasked with serving as CEO, acknowledged that digital disruption was threatening old business models. But they tried to express optimism.

“The scale and speed of this change will, to some, be overwhelming,” said Lachlan Murdoch, adding that on the plus side, “More people are watching more quality storytelling than ever. They’re just consuming it differently.”

James Murdoch said the company was working on ways to monetize the content that it releases on digital platforms, pointing to Fox’s recent $200 million purchase of TrueX, an advertising technology company, as evidence of its commitment to making online distribution more profitable.

He acknowledged that the technological disruption was resulting in a “rebundling” of sorts, something that gives investors a chill.