NEWS CORP'S share price has surged on a stronger than expected third-quarter profit and the announcement yesterday of a doubling of the group's share buy-back program.
The group recorded a 47 per cent rise in net profit to $937 million, and the chief operating officer, Chase Carey, took the opportunity of an analysts' briefing to launch a vigorous defence of his boss, the chairman and chief executive, Rupert Murdoch, lambasting a British parliamentary committee's assessment that he was unfit to run a media house.
The company attributed the robust results to a rise in earnings from strong performances in film, in particular the release of Alvin and the Chipmunks: Chipwrecked and The Descendants, and rising profits at the television production studios, as well as advertising growth at the media giant's cable TV networks.
Since first expanding the program when it closed the British tabloid News of The World last year, the company has so far repurchased $3.9 billion in shares, helping the company's share price outperform other media stocks. It will now lift the buyback program to $10 billion. On the local sharemarket, News Corp shares leapt 4.6 per cent to close at $20.16.
However the publishing division, which includes its Australian and British newspapers, continued to underperform. Falling advertising revenues drove operating income down $31 million in the quarter, compared with the previous corresponding period (excluding a litigation charge).
"This decrease primarily reflects lower advertising revenues at the Australian and UK newspapers, as well as the impact from the closure of News of The World," the News Corp chief financial officer, David DeVoe, said.
The publishing and film divisions were expected to report weak earnings in the fourth quarter and prompted a warning that overall growth for the group would be in the more modest "low to mid-teens range" .
Mr Carey opened his remarks to a conference call with a condemnation of the recent British inquiry's attack on Mr Murdoch, which last week released its report into News Corp's response to phone hacking allegations.
"The select committee delivered hard truths, most of which we openly acknowledge, however I flatly reject the report's notion that Rupert is unfit to run a major media company," Mr Carey said. "It is unjustified and in many people's opinion, including my own, a purely partisan finding.
"Rupert has taken great business risks, especially in the UK, where he has led News Corp's heavy investment building Sky, bringing great content and choice to 10 million homes and creating 19,000 jobs. We invested in The Times and The Sunday Times, titles that were nearly out of business before Rupert made a decision to save them.
"He is one of the smartest and most forward-thinking executives of our times."
The hacking investigations cost News Corp $63 million in legal and administrative fees in the March quarter, down from $125 million in the previous year.