What happened

Shares of Fox Corp. (NASDAQ:FOX) gained more than 5% on Thursday, after the newly streamlined media company reported better-than-expected earnings, on higher cable and satellite fees and strong content licenses.

So what

Fox was spun out as an independent earlier this year as part of Walt Disney's $71 billion acquisition of the television and studio businesses of Twenty-First Century Fox. After markets closed Wednesday, it reported fiscal first-quarter adjusted earnings of $0.83 per share on revenue of $2.67 billion, topping analyst expectations for $0.69 per share in earnings on sales of $2.6 billion.

A remote control pointed at a television set

Image source: Getty Images.

Quarterly net income of $513 million was down year over year due primarily to a change in the value of Fox's investment in Roku, but revenue was up 5% from the same quarter in 2018, as 14% growth in television affiliate revenue more than offset a 2% decline in advertising revenue. Fox also reported a 65% increase in other revenue, supported by growth in the television and cable-network programming segments.

In a statement, CEO Lachlan Murdoch highlighted ratings hits including The Masked Singer, WWE Friday Night SmackDown, and National Football League broadcasts as driving higher results. Murdoch also said:

The Company delivered strong financial results in the quarter and we are making tremendous progress on the operational goals and strategic initiatives that we outlined at our Investor Day in May. ... At the same time, we have successfully renewed distribution agreements with many of our largest partners that reflect the strength of our brands. This progress gives us further confidence in the Company's differentiated strategy and our ability to deliver long-term value for our shareholders.

Now what

Following the Disney deal, Fox is a smaller, more-focused company that's much more reliant on broadcast. Investors should keep close tabs on how well advertising revenue holds up in the quarters to come, especially if the U.S. economy falls into a recession. But for this quarter, at least, Fox's strategy to focus on sports rights and live events -- including wrestling, baseball, and football coverage -- seems to be working.