News Corp tried to focus attention on its strong quarterly business performance on Wednesday and away from the ongoing fallout from the phone-hacking scandal at its UK newspaper unit, which has rocked the company since it erupted in July.
Chief Executive Rupert Murdoch, often guilty of sparking headlines with off-script comments, was absent again from a conference call with Wall Street analysts and journalists. Murdoch, 80, now only takes part in end-of-year calls, according to an aide.
Chase Carey, Chief Operating Officer, said he wanted investors to focus on the media conglomerate's operational strength being wide and deep and that the company had made progress despite the UK issues.
But after nearly two-thirds of non-Murdoch affiliated News Corp B shareholders voted against the reelection of Murdoch's sons James and Lachlan to the board last month there are now serious questions about the future of a Murdoch-controlled News Corp and its board.
We take those votes seriously and the board will and is discussing those votes, said Carey who added that the company is proud of the current board.
In particular, James Murdoch -- Murdoch's younger son who oversaw the UK unit -- has been under severe pressure for his role in the phone-hacking affair. He is due to make a second appearance in front of a UK Parliamentary committee inquiry on Nov 10.
Carey also gave his support when asked if the company is planning for a change to James Murdoch's role. The younger Murdoch had until recently had been seen as the CEO successor to his father.
We have great confidence in James. James has done a good job, and we are not contemplating any changes, said Carey.
His father Rupert has publicly backed him despite numerous reports of internal family conflicts.
But in an upcoming article, Vanity Fair alleges that Rupert Murdoch suggested in July that James take a leave from the company, saying, maybe you should go.
CABLE, FOX STRENGTH
The company's cable networks and Fox broadcast business were significantly boosted by rising carriage fees paid by cable and satellite distributors.
News Corp reported a better-than-expected quarterly profit because of cable television and Fox broadcast network fees, even as the family-controlled company grapples with questions of who will lead it once Rupert Murdoch steps aside.
Fiscal first-quarter profit was $738 million (463 million pounds), or 28 cents a share, down from $775 million, or 30 cents a share, last year.
The quarter's net income included costs related to the restructuring of its UK newspaper arm after a telephone-hacking scandal, fees spent on its failed bid for full control of BSkyB and other Sky Deutschland costs.
In particular, the closure of weekly UK tabloid News of the World came in at $91 million, mainly from employee severance charges and a relatively small amount compared with its cable profit engine. But executives declined to clarify what amount had been reserved for future legal cases.
Excluding those items, profit was 32 cents a share. Analysts were expecting a profit of 29 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 7 percent to $7.96 billion.
These were very strong numbers beating our forecasts in every division on revenue and operating income except in publishing, said Collins Stewart analyst Thomas Eagan.
The September quarter was boosted by an 18 percent jump in operating income at its cable networks such as FX Network and Fox News on the back of a 13 percent rise in revenue.
The fees Fox received for carriage by cable and satellite distributors, rose by 9 percent in the United States and by 24 percent internationally.
News Corp's filmed entertainment unit operating profit rose by 24 percent thanks to the success of Rise of the Planet of the Apes and home entertainment sales of Rio and X-Men: First Class.
(Reporting by Yinka Adegoke, editing by Bernard Orr and Robert MacMillan)