CBS Posts Quarterly Gains That Underwhelm Investors

CBS posted third-quarter revenue that rose 2 percent to $3.37 billion and fell just shy of analysts expectations of $3.43 billion, sending its shares lower in after-hours trading.

our editor recommends

Producers Guild to Honor Leslie Moonves With Milestone Award

Net earnings, though, rose 7 percent to $338 million, or 50 cents per share, which was about 4 cents more than analysts expected, and during a conference call Wall Street analysts were congratulating CBS executives on what one called their "great numbers."

Advertising revenue rose minimally to $1.99 billion while content licensing and distribution revenue was up 5 percent to $867 million and revenue from affiliate and subscription fees rose 7 percent to $438 million.

On the call, CEO Les Moonves said CBS "is set up for a record-breaking 2012," in part because political advertising will kick into high gear during the presidential primary season and  into the general election a year from now.

PHOTOS: 9 Highest Paid Entertainment CEOs

That optimism, though, didn't play out so well on Thursday as CBS sat out a powerful Wall Street rally that sent the S&P 500 up more than 2 percent, as opposed to a 2 percent decline for CBS.  After the closing bell , CBS sunk an additional 2 percent.

CBS said Thursday, in fact, that it would increase its share repurchasing program by $1.5 billon after having already purchased $850 million in stock from a previous authorization of $1.5 billion.

Digital deals with the likes of Netflix and Hulu are playing a bigger role at CBS nowadays, and Moonves on Thursday credited them with making its share of The CW profitable.

Moonves also said that CBS hasn't been harmed by losing distribution of Oprah Winfrey's syndicated show.  "I won't say it's terrific to lose Oprah," he said, but added that CBS benefits because shows hosted by Judge Judy and Dr. Phil have become more popular with Winfrey's absence.

"The company's strong operating fundamentals and strategic improvements to its business model continue to pay off. I know that Leslie and his team will reach even greater heights as we look to 2012 and beyond," executive chairman Sumner Redstone said in the earnings release.

The release also touted strong performances from Showtime Networks, CBS Sports Network and Smithsonian Networks.