CBS Beats Quarterly Financial Expectations
The stock was 2 percent higher after the closing bell.
Courtesy of rising licensing and subscription fees, CBS narrowly beat profit expectations by posting $1.15 per share on an adjusted basis in the most recent quarter and exceeded revenue expectations by about $200 million.
CBS was expected to earn $1.14 per share on revenue of $3.7 billion. The company said sub fees rose 20 percent year-over-year, while licensing sales surged 33 percent.
Thursday's earnings report comes as CBS negotiates a potential merger with Viacom, both of which are controlled by Sumner and Shari Redstone via their National Amusements.
Earlier this month, the boards of both companies announced they had formed special committees to look into the possibility of recombining. Both CBS and Viacom said, however, that a deal is not guaranteed.
If made, the deal would likely be structured as CBS, with a market value of $22 billion, buying Viacom, with a market value of $13 billion.
CBS shares were up 2 percent during the regular session and another 2 percent after the closing bell. CEO Les Moonves said during an earnings call that he expects record earnings in 2018, with help from advertising related to mid-term elections. "There's a lot of rancor in the marketplace," he said while predicting a healthy political spend.
The exec said Showtime's streaming service and CBS All Access now boast nearly 5 million subscribers combined — roughly 2.5 million per service — and he expects a combined 8 million by 2020. Entertainment Tonight's streaming service comes in the fall, he said.
CBS recently lost Thursday Night Football after four years, outbid by 21st Century Fox, but Moonves played down the loss. "We love football. We like it better on Sunday than on Thursday," he said.
Moonves also downplayed the significance of Netflix poaching wiriter-producer-director Ryan Murphy (Glee, American Crime Story) from 21st Century Fox in a deal worth as much as $300 million that some saw as a blow to the traditional TV industry as a whole.
"Look, Ryan Murphy is an extraordinary talent, one of the greatest creators out there; they offered him hundreds of millions of dollars, he had to take it," Moonves said.
"But then you look at Chuck Lorre," the exec continued. "Chuck Lorre has three shows on CBS and he also has a couple of shows over on Netflix. So, we have a lot of the talent; there's a lot of room, the landscape does change, but we find new talent and we also continue to be in business with the best talent."