UPDATE, 3:05 PM: News Corp CFO David DeVoe had the thankless job today of telling analysts how much of a financial hit the company is taking as a result of the News Of The World hacking scandal. He says that the costs are “substantially higher than the amounts reflected in our guidance” three months ago: News Corp figures it spent about $104M in the six months that ended in December — including the $87M charge it just reported from the last quarter. About 85% of the payments went for professional fees — mostly lawyers. Much of the remainder was used to pay settlements. On top of that, the company expects to lose about $300M this year in its newspaper business — with about half of the loss in the UK, mostly tied to the closing of News Of The World.

COO Chase Carey was a lot more comfortable making the case that this is “a great time to be a content leader.”  He echoed some of the points that Time Warner’s Jeff Bewkes made this morning about pay TV and entertainment companies dragging their feet in launching TV Everywhere. “You can’t spend 3 or 4 years getting someting going,” he told analysts in a conference call. “All of us have to do a better job…It’s taking too much time.” More generally, he says that the digital video business ”has enormous growth.” He noted that “Netflix went through a rollercoaster but to their credit refound their footing.” Still, Carey said in an aside that he’s ”not sure I can figure out the partnership” announced this week by Verizon and Redbox to create a streaming video service. He also dismissed speculation that someone might try to offer a national, cable-like pay TV service over the Internet. “In some ways the greatest opportunity is when somebody develops something new for the market instead of a me-too.” Carey spoke admiringly about Apple, which he says “doesn’t win by being cheap. It creates a great experience and gets value for it.” Speaking of great experiences, Carey singled out cable channel FX where he says scatter ad prices are up 20%. “FX has been a great story for us.”

On other matters, Carey wouldn’t confirm reports that Rupert Murdoch’s oldest son, Lachlan, is poised to become chairman of News Limited — putting him in charge of News Corp’s Australian businesses. Carey noted, though, that “Rupert has said in the past he’d be delighted to have Lachlan in the company.” Carey also said that while News Corp is ”not looking to buy” the Los Angeles Dodgers, it is ”talking to a number of the bidders” about potential deals for broadcast rights. “We’ll see if there’s something that makes sense for us.” Meanwhile, News Corp is poised to lose about $75M this year from its investments for an education initiative it plans to unveil soon. Carey assured investors that “we’re in an early stage building mode” and “we’re not buying Pearson or McGraw-Hill.”

PREVIOUS, 1:07 PM: The cable networks and filmed entertainment units did the heavy lifting. News Corp reported net income of $1.1B for the last three months of 2011, up nearly 67% vs the period last year, on revenues of nearly $9B, up 2.4%. The revenue figure was slightly ahead of the $8.9B that analysts expected. The earnings picture is more complicated: It includes gains from the consolidation of Fox Pan American Sports as well as BSkyB’s share repurchase program — offset by a $36M charge for the declining value of the company’s UK and Australian newspapers, and the $87M charge linked to the investigations surrounding the News Of The World scandal. Excluding the one-time items, earnings came in at 39 cents a share — still easily ahead of the 34 cents that the Street forecast. The cable networks did their part with revenues up 9.5% to $2.2B. The company says that fees from pay TV companies were up 9%, partly driven by increases for the regional sports networks and FX. Domestic ad sales also grew 6%. Filmed entertainment revenues rose 14% to $2.1B. The unit was helped by Alvin and the Chipmunks: Chipwrecked (which has generated over $300M in worldwide box office receipts to date) and The Descendants (winner of Golden Globe for Best Picture – Drama and Best Actor – Drama and nominated for 5 Academy Awards including Best Picture and Actor in a Leading Role) and home video sales of Rio, Rise of the Planet Of The Apes, X-Men: First Class and Mr. Popper’s Penguins. Revenues for the Television operation, which includes Fox, were up 11% to $947M. Contributors include new shows such as X-Factor and The New Girl, as well as strong baseball and football games and a more than 100% increase in retransmission consent revenues. But Publishing revenues fell 9.2% to $2.1B, largely due to lower advertising — and the loss of contributions from News Of the World, which was closed last summer. News Corp’s “commitment to delivering value to our stockholders is unwavering,” CEO Rupert Murdoch says.

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