UK panel: Murdoch unfit, but News Corp profit, shares flourish

News Corp’s (NWSA: US) profit increased 47% in the third quarter of the 2012, despite a UK panel saying founder Rupert Murdoch was unfit to run a company.

CEO Chase Carey defended Murdoch, saying he “flatly rejected” assertions by the UK Parliamentary committee.

“He’s one of the smartest, forward thinking executives of his time,” Carey said during an analysts call, according to the Australian Financial Review.

A UK committee said this month Murdoch is “not a fit person to exercise the stewardship of a major international company”.

Investors disagreed with the British panel too, as the company’s shares have increased 7.3% since the phone hacking story broke in the UK, and Murdoch closed the News of the World newspaper at the centre of the scandal.

The $US937 million third quarter net profit after tax was helped by growth at its cable networks and film studio.

The global media giant’s cable networks outperformed the industry during a time of weak ratings.

The owner of Fox Broadcasting, 20th Century Fox movie studios and Fox News, makes 70% of its profit from television, and now looks to expand its pay-TV business outside the US. It has a 40% stake in British Sky Broadcasting Group (BSY; LN).

Its publishing unit, which includes the Wall Street Journal in the US, The Australian, The Courier Mail, The Herald-Sun and the Daily Telegraph in Australia and The Sun in the UK, declined 2.8% to $US2.03 billion.

News Corp doubled its share-buyback program to $10 billion.

David Bank, an analyst with RBC Capital Markets recommends buying the stock.  “We continue to see solid operating momentum,” said Bank.

News Corp climbed 2.7% to $19.90 immediately after the results were released. The shares, up 8.6% this year, closed at $19.38 in New York.

Murdoch, 81, who now controls about 40% of News Corp’s voting shares, inherited a small newspaper in Adelaide and built it into a global media company.