EARNINGS
Entertainment boosted Fox last quarter

Twenty-First Century Fox’s entertainment assets helped push earnings past Wall Street estimates last quarter, validating a plan by Walt Disney Co. to acquire the business.

Movies like “Deadpool 2” and cable-network subscriber fees contributed to earnings of 57 cents a share in the fiscal fourth quarter, excluding some items. Analysts estimated 54 cents a share on average for the company, which is controlled by billionaire Rupert Murdoch.

Fox shareholders approved a $71 billion deal last month to sell off Twentieth Century Fox studio and cable channels, such as FX and National Geographic, to Disney. The remaining parts of the companies will be used to create “New Fox,” which will retain the Fox network, Fox News and other assets.

Revenue rose 18 percent to $7.94 billion last quarter, topping the $7.55 billion estimated by analysts.

Earnings for cable-network programming grew 12 percent to $1.61 billion in the quarter that ended June 30. Filmed entertainment posted a profit of $289 million, compared with a loss of $22 million a year earlier.

— Bloomberg News

TAXES
Treasury proposes pass-through rules

The U.S. Treasury on Wednesday proposed rules for a new 20 percent income tax deduction for owners of businesses organized as pass-through entities, including rules to prevent the measure from becoming a tax loophole for wealthy Americans.

The rules are intended to provide everything pass-through owners need to comply with the Republican Tax Cuts and Jobs Act signed into law in December.

About 30 million U.S. businesses are organized as pass-through entities, according to the nonpartisan Tax Foundation. Rather than operating like corporations with shareholders, these businesses pass profits through to their owners as personal income.

The regulations provide the deduction by limiting a tax code provision that could otherwise deny the benefit to any businesses based principally on the skill or reputation of owners or employees, analysts said.

Analysts have warned that wealthy taxpayers could try to seize the full deduction improperly by declaring themselves contractors or splitting off a restricted firm’s nonrestricted income into a separate entity. Treasury officials said the new regulations include anti-abuse safeguards.

— Reuters

Also in Business

CVS Health reported a better-than-expected second quarter Wednesday and reassured investors that it doesn't depend heavily on much-criticized prescription drug rebates that regulators may eliminate. Chief executive Larry Merlo told analysts that rebates from drugmakers will amount to only about 3 percent of the company's adjusted earnings this year. In the second quarter, CVS Health lost $2.56 billion, due to a hefty charge from its long-term care business. But adjusted earnings, which don't count such one-time items, came in at $1.69 per share. Revenue rose two percent to about $46.7 billion. Both figures beat expectations.

A Virginia newspaper owner is suing a former reporter for refusing to give up control of a Twitter account the paper says it owns. BH Media Group, the parent company of the Roanoke Times, filed a lawsuit Monday alleging that college football reporter Andy Bitter has misappropriated trade secrets by using the account at his new job at the Athletic website. Another reporter started the account, and the paper gave it to Bitter in 2011. The lawsuit alleges Bitter was issued an employee handbook that makes it clear social media accounts "and communications on those accounts" are BH Media's property.

A federal appeals court on Wednesday rejected an antitrust challenge by 23 beer drinkers to Anheuser-Busch InBev’s $107 billion purchase in 2016 of SABMiller, which they claimed would thwart competition and raise prices in the U.S. beer market. The U.S.Court of Appeals for the 9th Circuit in Portland, Ore., said SABMiller’s agreement with antitrust regulators to divest its U.S. beer business, by selling its stake in the MillerCoors joint venture to Molson Coors Brewing Co., would prevent increased concentration in the industry.

— From news services

Coming today

8:30 a.m.: Labor Department releases the Producer Price Index for July.

10 a.m.: Commerce Department releases wholesale trade inventories for June.

10 a.m.: Freddie Mac, the mortgage company, releases weekly mortgage rates.