UPDATE 3-Murdoch re-elected to BSkyB board as profit climbs
* James Murdoch re-elected with 95 pct shareholder support
* BSkyB Q1 EPS up 16 pct to 13.4 pence
* Adjusted operating profit up 5 pct to 310 mln pounds
* Shares rise 7 pct
By Kate Holton
LONDON, Nov 1 (Reuters) - James Murdoch was re-elected to the board of BSkyB on Thursday, ensuring his family's media empire retains a direct influence at Britain's biggest pay-TV company despite being weakened by a phone hacking scandal.
James Murdoch, forced to quit as BSkyB chairman in April over his role in the scandal at his father Rupert's News Corp , was re-elected as a BSkyB director with around 95-percent support in a shareholder vote at an annual meeting.
The re-appointment came after BSkyB, which is 39-percent-owned by News Corp, posted strong first-quarter earnings growth, with price rises and the sale of additional products to subscribers reassuring investors who had feared a slowdown.
BSkyB shares were up 7 percent in afternoon trade. The stock had come under pressure from fears the provider of pay-TV, broadband and telephone services would struggle to grow in a weak economy and maturing market.
"Solidly reassuring, with all key metrics showing improvement over Q1 2012," said Peel Hunt analyst Patrick Yau of the results.
News Corp had planned to buy up the rest of BSkyB last year, but was forced to drop its bid after its British newspaper News of the World was discovered to have hacked phones.
James Murdoch, who also managed the newspaper, was criticised by parliament and regulators for failing to get to the bottom of the criminal activity, and BSkyB shareholders took turns at last year's annual meeting to tell him to step down as chairman to prevent the firm from being tarred by association.
In the first three months of its new financial year, BSkyB signed up 48,000 new households, in line with forecasts, with 20,000 additions to its core pay-TV offering.
That is some way off the 100,000-plus pay-TV subscribers it often used to sign up per quarter, but the group said one in three of its customers now took TV, broadband and telephone services, which helped to lift the average amount each customer spent with the group.
Customer loyalty also remained strong, despite the first price rise in two years kicking in.
"Despite market fears over new competition, TV adds (customer additions) continued to grow," Morgan Stanley analysts said in a research note. "This puts into perspective recent concerns that Sky might suffer a fall."
The solid operating performance, the price rise and a share buyback programme lifted earnings per share 16 percent to 13.4 pence, while revenue climbed 4 percent to 1.7 billion pounds and adjusted operating profit rose 5 percent to 310 million pounds.
All three numbers were either in line with or slightly above forecasts.
At 1500 GMT, BSkyB shares were up 7 percent, within a UK benchmark index up 1.3 percent.
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