(Reuters) - Twenty-First Century Fox Inc FOXA.O, the television and film company controlled by Rupert Murdoch, reported quarterly revenue below Wall Street's expectations on Wednesday, weighed down by weaker box office results.

FILE PHOTO - The 21st Century Fox logo is seen outside the News Corporation headquarters in Manhattan, New York, U.S. on April 29, 2016. REUTERS/Brendan McDermid/File Photo

Its shares initially dipped in after-hours trading, but then regained ground to where they ended regular trading, at $27.90.

Sales at the company’s film division fell nearly 3 percent to $2.26 billion in the fiscal third quarter as releases like “Logan”, grossed less than the 2016 hit “Deadpool” did in the same quarter last year.

The television side of Fox’s business fared better, posting an increase in both advertising and U.S. cable, even as many of its peers have reported declines in both areas.

Fox’s ad sales jumped 16 percent, helped by spending on the Super Bowl, which Fox aired this year. Chief Executive James Murdoch, Rupert’s son, told analysts on a post-earnings call that all of its networks except National Geographic showed advertising growth.

Still, some analysts hoped for more.

“The cable business is more of a recurring business than film,” said Telsey Advisory Group analyst Thomas Eagan. “People were expecting higher domestic affiliate growth and higher ad growth.”

U.S. subscribers were up 0.5 percent, but there were declines for its most widely distributed networks, which include Fox News, of about 1.5 percent year over year, James Murdoch said on the analyst call.

Sexual harassment claims and lawsuits at Fox News, which have led to the departures of its former chair Roger Ailes, network co-president Bill Shine and star anchor Bill O’Reilly, have some investors concerned about the future of the unit.

To settle litigation following the July 2016 resignation of Ailes, the company incurred costs to the tune of $10 million in the quarter, bringing such costs to a total of $45 million in the nine months to March 31, a regulatory filing showed.

James Murdoch expressed confidence to investors on the earnings call that Fox News would continue its ratings dominance.

The British government has asked the UK media regulator Ofcom to assess whether Twenty First Century Fox’s $14.5 billion bid to buy the nearly 61 percent of UK-based pay-TV group Sky Plc <SKYB.L that it does not already own is in the public interest.

Excluding some items, Fox earned 54 cents per share for the quarter ended March 31. Analysts on average had expected a profit of 48 cents per share.

Total revenue rose 4.6 percent to $7.56 billion but missed analysts’ average estimate of $7.63 billion, according to Thomson Reuters I/B/E/S.