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'X Factor' and 'American Idol' ratings decline impacts 21st Century Fox earnings guidance

LOS ANGELES, CA - MAY 23:  Judges Randy Jackson, Jennifer Lopez, and Steven Tyler cheer onstage during Fox's
LOS ANGELES, CA - MAY 23: Judges Randy Jackson, Jennifer Lopez, and Steven Tyler cheer onstage during Fox's "American Idol 2012" results show at Nokia Theatre L.A. Live on May 23, 2012 in Los Angeles, California. (Photo by Mark Davis/Getty Images)
Mark Davis/Getty Images

21st Century Fox on Thursday lowered its earnings outlook, citing a weaker-than-expected performance in its film division and declining audiences for talent competition TV shows "The X Factor" and "American Idol."

Chase Carey, president and chief operating officer, said the ratings for American Idol "fell faster than we hoped," although directionally it's not different.

"So this transition of the network from having this sort of locomotive that's sat there in the middle of it that generated unique profits, we've known is coming to the end," Carey told investors on a webcast call on Thursday. "It's sort of winding down to a place where it becomes just a great successful show again."

The New York-based company said it expects the percentage growth of a performance metric known as EBITDA (earnings before interest, taxes, depreciation and amortization) in the mid to high single digit range in fiscal year 2014, over last year's EBITDA base level of $6.26 billion. The company said last year that it had expected fiscal year 2014 EBIDTA to grow in the high single to low double-digit range. 

Revenues increased 18 percent in fiscal quarter

21st Century Fox said it had $1.2 billion in net income in its fiscal quarter ending Sept. 30. Revenues increased 18 percent to about $7.1 billion, the company said.

Carey said despite the lower EBITDA guidance, he believes "structurally and strategically, we've never been stronger and better positioned."

The company's cable network programing, which includes properties like the FX Network and Fox News Channel, saw sales increase 12 percent to $2.8 billion. The increase was due to its recently acquired businesses, which include ESPN Star Sports, and was offset by its investments in new channels, such as Fox Sports 1 and FXX.

The television division saw an increase of 8 percent to $1 billion in revenues., 21st Century Fox said. The business benefited by a doubling of retransmission consent revenue, offset by declining audiences at the "X Factor" and less political advertising.

The filmed entertainment division saw sales increase 9 percent to $2.1 billion, but its operating income before depreciation and amortization declined due to comparisons against last year's popular movie Ice Age: Continental Drift. The revenue increase was due to the syndication of "Modern Family" and money related to its sale of the first two seasons of "New Girl" to Netflix.

Sales at direct broadcast satellite television increased 68 percent to nearly $1.4 billion. These results reflected media company Sky Deutschland revenue, which 21st Century Fox purchased a controlling stake in January 2013. 

21st Century Fox stock was trading at $31.60 a share on Thursday afternoon, up 45 cents.