CBS Beats Earnings Expectations, Stock Rises

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CBS CEO Leslie Moonves

Revenue in the first quarter was actually down $250 million from the same frame last year, but CEO Les Moonves blamed that on tough comparisons, considering CBS hosted the Super Bowl in 2016 but not in 2017.

Rising retransmission fees helped CBS beat analyst predictions in the quarterly earnings announced Thursday, and the stock was rising 2 percent after the closing bell after finishing 1 percent higher in regular trading.

The company reported earning $1.04 per share on an adjusted basis, while analysts expected 96 cents. It also said revenue was $3.34 billion, while Wall Street was looking for $3.27 billion. 

Revenue in the first quarter was actually down $250 million from the same frame last year, but CEO Les Moonves blamed that on tough comparisons, considering CBS hosted the Super Bowl in 2016 but not in 2017.

The company said affiliate and subscription fee revenue increased 17 percent, largely because retransmission revenue paid by CBS affiliates jumped 28 percent.

While the lack of a Super Bowl caused ad revenue to dip to $1.6 billion from $2.1 billion a year earlier, revenue from content licensing and distribution rose to $845 million from $729 million and affiliate and subscription fees rose to $842 million from $722 million.

On a conference call Thursday to discuss earnings, an analyst asked Moonves if it would bother him if rival 21st Century Fox purchased Tribune Media, which has some TV stations that are CBS affiliates.

"Anybody who buys stations — big, small — we're happy to do business," the exec said. "I'll have Rupert [Murdoch] on stage with me [at the affiliate meetings]. It will be fine," he quipped.

CBS produced 22 percent more original content year-over-year, and Moonves raved about the upcoming shows Twin Peaks and I'm Dying Up Here, which debut on the CBS-owned Showtime on May 21 and June 4, respectively.

Moonves said the merger of CBS Radio and Entercom Communications is on track to close by year's end.

He wouldn't say how many people subscribe to CBS All Access, but he said it saw a spike in the last two weeks of the NFL season last year after a deal allowed the digital service to stream games, and he has confidence it should see a boost this year, as well, with more games set for All Access.

The exec added, though, that "the Big Kahuna" for All Access will be Star Trek: Discovery, due this fall.

Moonves said he was happy a writers strike was averted and called the recently struck deal "appropriate for the industry."

"You will not see an adverse effect to the bottom line for us," he said about the writers' deal.

Moonves said, as he usually does, that CBS is a must-have network for any skinny bundle, and he added that he sees opportunity in licensing shows to social-media platforms like Snapchat. "We are open to any sort of deal," he said.

 

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