News Corp profit beats forecasts on cable, movies
(Reuters) - Rupert Murdoch's News Corp (NWSA.O) on Wednesday posted a stronger-than-expected quarterly profit, aided by its cable networks and movie studio business, and its shares rose 2.7 percent in post-market trade.
Investors also welcomed news that the board had approved another $5 billion in share buybacks, bringing the ongoing program to a total of $10 billion, to be completed by the end of the 2013 fiscal year.
Murdoch and his company have been embroiled in a phone hacking scandal at its UK newspapers that has reverberated throughout the wider New York-based media conglomerate.
A UK parliamentary select committee report published last week said Murdoch was unfit to run a major international business. The News Corp board came out in full support of Murdoch, saying he had shown vision and leadership in building the business.
On a conference call with analysts, Murdoch's second in command, Chase Carey, reiterated his support for his boss, saying he "flatly rejects" any notion Murdoch was unfit to run the business. He also called report partisan.
The fallout from the phone hacking scandal has also disrupted what was thought to be a smooth plan for Murdoch to be succeeded as CEO by his youngest son, James. But as James Murdoch oversaw the European unit that included the British newspapers, his judgment has been called into question and he has resigned from as chairman of BSkyB and News International.
Carey told investors he was not considering if James Murdoch would step down from the News Corp or BSkyB boards.
Rupert Murdoch did not make an appearance at the quarterly conference call with analysts. Murdoch has in recent quarters left the call to Carey and Chief Financial Officer Dave Devoe. Murdoch usually shows up at the end of financial year call in August.
The company's fiscal third-quarter net income rose to $937 million, or 38 cents a share, from $639 million, or 24 cents a share, a year ago.
On an adjusted basis, News Corp earned 37 cents, compared with the 31 cents expected on average by analysts, according to Thomson Reuters I/B/E/S.
The quarter's profit was hurt by a charge of $63 million, or 2 cents a share, for costs related to costs of the ongoing investigations initiated upon the closure of the tabloid at the center of the hacking scandal, News of the World.
In the first nine months of News Corp's fiscal year it has racked up charges of $167 million related to phone hacking. Most of the costs include legal fees and settlements.
Revenue increased 2 percent to $8.4 billion.
At its cable networks, which include FX and Fox News, revenue rose 16 percent on an increase in affiliate fee revenue from cable and satellite distributors. Advertising revenue at its domestic cable channels rose 10 percent.
Operating income at the company's movie unit rose 9.7 percent to $272 million, on the success of films like "Alvin and the Chipmunks: Chipwrecked" and "The Descendants."
In after-market trade, News Corp shares were up 2.7 percent at $19.90, after closing at $19.38 on the Nasdaq.
(Reporting by Yinka Adegoke; Editing by Steve Orlofsky)