FRANKFURT (Reuters) - German pay-TV company Sky Deutschland (>> Sky Deutschland AG) reported its first quarterly net profit since 2007 on Monday as it prepares to be absorbed into a European media giant being formed by Britain's BSkyB (>> British Sky Broadcasting Group plc).
Sky Deutschland, currently controlled by Rupert Murdoch's entertainment group 21st Century Fox (>> Twenty-First Century Fox Inc), booked a net profit of 12.3 million euros (9.61 million British pounds)in the three months to Sept. 30, the first quarter of its fiscal year.
Chief Executive Brian Sullivan warned that Sky Deutschland will have some loss-making quarters before posting annual net profit.
"The reality is that we will go in and out of net income for the next quarters before posting annual net profit," Sullivan told reporters in a conference call.
Sky Deutschland is in the process of being combined with other parts of Murdoch's European pay-TV empire in Britain and Italy.
BSkyB, itself 39-percent owned by Fox, agreed in June to pay $9 billion for Rupert Murdoch's 57 percent stake in Sky Deutschland and all of Sky Italia to create a media powerhouse with 20 million customers.
BSkyB has made a 6.75 euro-offer for Sky Deutschland which is to expire at midnight German time (2300 GMT) on Monday.
BSkyB has said it will acquire at least 68.8 percent of Sky Deutschland shares based on the 21st Century Fox stake and other commitments it has received.
Sky Deutschland shares were up 0.3 percent at 6.7490 euros at 1005 GMT after briefly trading at 6.7550 euros.
Analysts played down speculation of an increased offer to buy out the remaining minority shareholders after Sky Deutschland published its results a day earlier than scheduled.
"The buy-out offer from BSkyB of 6.75 euros will run out tonight which may be the main reason for publishing the results a day earlier than initially planned," said Wolfgang Specht, an analyst at German broker Bankhaus Lampe.
"We believe the likelihood of an improved offer in the short term is limited. We therefore recommend investors to tender the shares," he said sticking to his "sell" recommendation.
Sky Deutschland's net subscriber numbers increased by 96,000 during the first quarter of the 2014/15 fiscal year.
Like its British counterpart, Sky Deutschland has been using sports rights to help build its business.
The broadcaster said it set a new record for live viewing of domestic Bundesliga soccer after the German national team won the World Cup. In the first weekend of matches, played in August, more than 4 million viewers tuned in to the live matches, which Sky said was its best season opening ever.
(1 British pound = 1.2795 euro)
(Reporting by Harro ten Wolde; Editing by Keith Weir)
By Harro Ten Wolde
