CBS Corp. Reports Higher First-Quarter Earnings, Touts Record Quarter
UPDATED: The entertainment company, led by CEO Leslie Moonves, posted another set of solid results that it said marked a record and that exceeded Wall Street expectations.
CBS Corp. on Tuesday reported record first-quarter results as advertising growth and revenue from digital content deals with the likes of Netflix continued to benefit the entertainment company.
The company said it hit its highest revenue and earnings - as measured by several metrics - since its split from Viacom in 2006. President and CEO Leslie Moonves also predicted a record year for the company.
CBS Corp. reported first-quarter earnings of $363 million, up 80 percent compared with $202 million in the year-ago period. Revenue rose 12 percent to $3.9 billion, including an advertising gain of 5 percent. Content licensing and distribution revenue rose 39 percent, driven by licensing agreements for digital streaming, as well as international and domestic syndication sales.
The company's quarterly figures exceeded Wall Street expectations.
Moonves highlighted that non-advertising revenue, such as syndication, digital licensing and retransmission consent, are having a "huge impact" on the company, contributing 39 percent of total revenue.
"As great as these last few years have been, this quarter tops it all,” said executive chairman Sumner Redstone. “I have never been more confident about our company’s future than I am today."
"The transformation of CBS’s business model continues, and I am extremely pleased that we posted record results," said Moonves. “Our ability to capitalize on the fundamental shifts in our industry has led to the growth of significant new revenue streams and has also allowed us to increase our share of non-advertising revenue. At the same time, we continue to benefit from underlying advertising growth."
Moonves also mentioned the upcoming upfront season. "We greatly look forward to building on our leading position when we unveil our new primetime schedule in a couple of weeks," he said. "We will then sell that lineup into what we’re confident will be a very healthy upfront marketplace, and begin anew the process of monetizing our programming through the burgeoning content value chain. So, with political dollars due to ramp up in the back half of 2012, and with the syndication programming pipeline we have established for 2013, we look forward to the future with great confidence.”
On a conference call with analysts, Redstone said the latest results were "nothing short of amazing," adding that the company's content is so strong that "it commands a premium." He once again introduced Moonves as a "good friend" and a "genius."
Moonves once again vowed that CBS would lead broadcast upfront sales. After previously calling for double-digit upfront price increases, he said Tuesday that "advertisers have come back in a very strong way," and CBS plans to sell 80 percent of its ad inventory in the upfront, but is ready to hold back on sales if it doesn't get the desired price increases.
Highlighting the strength of CBS's current schedule, Moonves said the network is about to finish as the top network for the ninth time in 10 years and is looking to win this season by the biggest margin since the begin of the modern ratings system 25 years ago.
Moonves on the call also lauded the CBS Evening News for being the only broadcast evening news show to be up in the ratings year-over-year. And he mentioned the recent death of 60 Minutes star Mike Wallace. "We lost a true legend in the history of broadcast journalism," he said.
CBS Corp. on Tuesday also outlined events and business trends that will ensure a strong 2013. The SuperBowl 2013 and ad strength in this May's upfront will help set the stage for a good TV year, the company said. The NFL's AFC championship game and Grammys will mean that CBS will have three major primetime events within four weeks early in 2013. Plus, NCIS: LA and The Good Wife will become available for first cycle syndication next year, CBS added as further examples of next year's growth drivers.
One figure that turned heads Tuesday was that 24 percent of the revenue in CBS's Simon & Schuster book unit are now coming from e-books.