21st Century Fox Jumps on Earnings Beat: Tech Winners & Losers

NEW YORK (TheStreet) –– 21st Century Fox (FOXA) shares rose 7.5% to $34.76 after reporting strong quarterly earnings.

For its fourth quarter, which ended June 30, the media giant reported earnings of $8.42 billion, a 17% increase year-over-year, and earnings of 42 cents per share. Analysts polled by Thomson Reuters expected earnings of 38 cents per share on revenues of 7.99 billion. Revenue in Cable Network Programming was $3.35 billion, up from $2.95 billion in the same quarter last year. In the Filmed Entertainment segment, revenue grew 38% year-over-year to $2.80 billion, led by the international releases of X-Men: Days of Future Past, Rio 2, and The Fault in Our Stars, which have grossed $740 million, $490 million, and $260 million, respectively, in worldwide box office to date.

In the television segment, however, operating income fell to $145 million from $213 million a year earlier, and advertising revenue in the segment fell 11% year-over-year. The company attributed these declines to lower ratings, especially in the program American Idol.

“In the fiscal fourth quarter we built on our operational momentum with double-digit earnings and revenue gains,” said CEO Rupert Murdoch in the press release. “As we close the fiscal year, I continue to have confidence in our ability to execute our growth plan and drive value for our shareholders.”

The earnings were released shortly after the company said yesterday that it was abandoning its attempt to purchase Time Warner (TWX).

Unusually, Murdoch participated in the earnings call following the release of the earnings, for the first time since the News of the World hacking scandal. News of the World and Time Warner both belonged to the former behemoth News Corp. (NWS). In 2013, the company was split into 21st Century Fox, which consists primarily of media outlets, and News Corp (NWS), which focuses on publishing.

Amazon.com (AMZN) shares fell 0.6% to $312.03 after Google (GOOG) and Barnes & Noble (BKS) began a partnership to compete with the company.

Yesterday, Amazon announced that it was expanding same-day delivery to six more cities: Baltimore, Dallas, Indianapolis, New York City, Philadelphia, and Washington DC. Over a million items are eligible for these deliveries. Amazon Prime members pay a fee of $5.99.

“Imagine how much time you will save now that you can get sunscreen, memory cards, toothpaste, hit movies, text books and HDMI cables all delivered to your home in hours, seven days a week, in one order from Amazon,” said Amazon Prime Vice President Greg Greeley in the press release announcing the expansion. “New convenient pricing also allows Prime members to fill up their same-day shopping cart with everything they may need for one low price. With more than a million eligible items, we aim to offer the largest same-day selection at the lowest price.”

Similarly, today Google and Barnes & Noble began offering one-day book delivery from local Barnes & Noble stores through Google Shopping Express. These deliveries are restricted to Manhattan, San Francisco, and West Los Angeles. Normally Google Shopping Express charges $4.99 for same-day delivery, but no such fee is applied for print books.

Google Shopping, which began operations last year, allows customers to place orders online for products from stores including Costco (COST) and Target (TGT) and have them delivered to their homes.

Barnes & Noble has struggled in recent years to compete with Amazon, closing 63 stores since 2009. In its last quarterly report, the company reported that Nook e-book sales fell 22% year-over-year.

Neither Google nor Barnes & Noble could not be reached for comment.

Shares of Zynga (ZNGA) rose 1.8% to $2.84 ahead of the release of quarterly earnings.

Analysts polled by Thomson Reuters expect Zynga will report flat earnings per share on revenues of 191.2 million. Last quarter, the company lost a penny per share, in line with expectations. The mobile gaming company, the creator of the popular FarmVille, has many strong competitors, including King Digital (KING), Electronic Arts (EA), and Glu Mobile (GLUU).

Some analysts remain optimistic about Zynga's ability to regain its lost market share. Michael Pachter of Wedbush holds an “outperform” rating on the stock and a price target of $7. He expects earnings of 1 cent per share on revenues of $195 million, ahead of consensus, driven by the release of mobile games Zynga Poker and Farmville 2. For the full year, Pachter projects earnings of $770 million to $810 million and earnings of 1 cent to 3 cent, but cautioned, “In order to hit that range, Zynga would need to introduce one or two high-profile games well before year-end.”

Telsey Advisory Group analyst James Cakmak also issued a bullish report. He has a price target of $6 on the stock, writing that Zynga “is a pioneer and leader in social online gaming with substantial potential.” He projects revenues of $194.4 million and a loss of 1 cent per share. Zynga’s turnaround, according to Cakmak, can only be successful if the company is able to “augment mobile penetration and reduce reliance on Facebook (FB).”

Zynga reports its earnings this afternoon after the market close.

SunEdison (SUNE) shares spiked 12.7% to $21.77 following the release of second-quarter earnings that beat analysts’ expectations.

Yesterday, the silicon wafer manufacturer and developer reported a net loss of 16 cents per share on revenues of $646.2 million. This loss was narrower than expected: analysts surveyed by Thomson Reuters forecast a loss of 28 cents per share on revenues of $571.7 million. Revenue growth was over 60% year-over-year. Solar Energy net sales increased 36% year-over-year to $342.9 million, while net sales in Semiconductor Materials declined 11% to $214.6 million year-over-year but rose 4% sequentially.

"The second quarter was a transformational period for SunEdison. Our teams superbly executed multiple complex financing initiatives while keeping our core business on track," said CEO Ahmad Chatila in a statement. "We believe we are increasingly well positioned to succeed in this rapidly growing and dynamic market."

The company ended the quarter with $954.7 million in cash and equivalents and $176.1 million in cash committed to construction projects, for a total of $1.13 billion.

--Written by Laura Berman in New York

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