James Murdoch won re-election to the board of pay-TV giant BSkyB on Thursday, shaking off a recent attack by Britain's media watchdog over his handling of the hacking scandal at his father Rupert's empire.

His re-appointment was confirmed after BSkyB announced that group net profits fell in its first quarter, as an exceptional loss offset a rise in revenues as new customers tuned in to watch the Olympics and other British sporting successes.

Profit after tax fell by 2.6 percent to 219 million pounds ($354 million, 274 million euros) in the three months to September 30 compared with the outcome in the first quarter of its 2011/12 financial year.

James Murdoch meanwhile avoided an embarrassing revolt over his position on the board, when he was overwhelmingly re-elected at the company's annual general meeting in London, with almost 95 percent of shareholders voting in favour.

Shareholder group Pensions Investment Research Consultants (Pirc) had urged shareholders to vote against James Murdoch's re-appointment in light of heavy criticism of him by Britain's media watchdog.

The regulator, Ofcom, in September allowed BSkyB to keep broadcasting, but blasted James Murdoch for failing to uncover a hacking scandal at his father's empire.

James Murdoch stepped down as BSkyB chairman earlier this year amid the hacking crisis fallout but remained as a non-executive director.

Rupert Murdoch's News Corporation abandoned a bid in 2011 to win full control of BSkyB in the wake of the phone-hacking scandal which forced it to shut British tabloid newspaper News of the World and pay large compensation to celebrities.

News Corp. had bid 7.8 billion pounds for the 60.9 percent of BSkyB it did not already own. BSkyB had rejected the 700-pence-per-share offer even before the bid collapsed.

With investors welcoming the group's latest solid earnings, BSkyB shares surged 7.12 percent to stand at 759.5 pence in late afternoon deals on London's benchmark FTSE 100 index, which was up 1.37 percent at 5,861.98 points.

BSkyB said its net profit included an exceptional loss of 3.0 million pounds relating to the "re-measurement" of certain financial instruments.

Group revenue though rose 4.0 percent to 1.715 billion pounds in the first quarter for BSkyB, which competes with Virgin Media and BT for pay-television customers.

"We have made a strong start to the year, delivering another good quarterly performance and continuing to position the business for the long term," BSkyB chief executive Jeremy Darroch said in the group's earnings statement.

"Looking forward, whilst we continue to see a challenging consumer environment in the UK and Ireland, we are well positioned to execute our plans for the year."

BSkyB broadcasts the 24-hour Sky News channel, live sport including the English Premier League football and blockbuster movies and also provides broadband Internet and telephone services.

"With the London 2012 Olympic and Paralympic games falling in the (first) quarter, we focused attention on providing a differentiated offering for our customers (...) In total, over 14 million people watched the dedicated (Sky Olympics) channel."

It added: "It was a strong September for Sky Sports. We achieved record audiences for tennis, with Andy Murray's US Open Tennis victory attracting 4.5 million viewers.

"We also had a spectacular response to our coverage of the Ryder Cup, reaching 4.8 million viewers."

BSkyB has 10.65 million paying customers after signing up a net 533,000 clients in the three months to the end of September, it added on Thursday.