NEW YORK (Reuters) - Shares in Rupert Murdoch’s News Corp (NWSA.O) rose as much as 15 percent in early trading on Thursday, a day after the company’s management posted solid quarterly results, gave a healthy full-year outlook and promised a more aggressive buy back.
Murdoch said on Wednesday he had the backing of his board to continue as chairman and chief executive after a critical five weeks for the company in the wake of a phone-hacking scandal at its British newspapers unit that threatened to unravel his control of the company he founded.
He also said Chief Operating Officer Chase Carey would take over if anything were to happen to him, quelling speculation that his son James was next in line. Carey is favored by the investment community to take over if Murdoch steps down.
News Corp, which owns Fox TV and cable networks, and newspapers including the Wall Street Journal and The Sun in Britain, forecast “low to mid teens” percentage points growth in operating profit for the fiscal year 2012.
Murdoch and Carey promised an accelerated share buy-back of the stock, which has dropped in value by nearly a fifth since the scandal erupted on July 4.
The executives said it was possible that the $5 billion buy-back, which was announced on July 12, could be expanded if they believe the stock continued to be undervalued.
“News Corp made the best answer we can imagine to ‘hack-lash,’ saying it plans to use the bulk of its cash, plus free cash flow to buy back stock,” Lazard Capital analyst Barton Crockett said in a client note.
News Corp shares rose about 15 percent to $15.70 in early trading.
Reporting by Yinka Adegoke, editing by Maureen Bavdek