Analysts Don't Ask About Moonves Investigation or Payout on CBS Earnings Call

CBS

The company was expected to earn $1.22 per share on revenue of $3.24 billion, but it posted $1.24 on $3.26 billion.

Reporting its quarterly results for the first time since embattled former CEO Leslie Moonves stepped aside amid allegations of sexual misconduct, CBS said Thursday it earned slightly more than analysts had predicted on more revenue than anticipated.

CBS was expected to earn $1.22 per share on revenue of $3.24 billion, but it posted $1.24 on $3.26 billion.

In its earnings three months ago, shortly after The New Yorker reported the Moonves allegations, CBS warned that Moonves would not answer questions unrelated to the financial report. While there was no similar admonition this time, analysts still did not broach the topic on Thursday, even to ask how an ongoing investigation into whether or not Moonves will receive a severance of $120 million or not is progressing.

"We turned in our best third quarter on revenue and earnings per share," said Joe Ianniello, the former COO who is now interim CEO.  

Ianniello boasted Thursday that CBSN, the digital news service launched in 2014, has an audience of 1 million streams per day with viewers who are an average age of 38.

The exec also said an initiative called DNA will help sell targeted ads  — way beyond mere demographics like age — across linear television, not just for on-demand TV. "It's going to be a slow and steady rollout," he said.

Ianniello is under the gun to prove he is worthy of being made permanent CEO as the CBS board conducts an extensive search that includes outside candidates.

There have been numerous changes in the top ranks at CBS, including making former Time Warner CEO Richard Parsons chairman of the board on Sept. 25, only to see him quickly leave the position for health reasons.

Parsons was seen as someone who could help CBS merge, either with Viacom, as both companies are controlled by Sumner and Shari Redstone, or another entity in a quest to get bigger in order to compete with WarnerMedia, now part of AT&T, and Walt Disney, which is absorbing most of the entertainment assets of 21st Century Fox.

Ianniello's top job is to get CBS stock headed north again, as shares closed Tuesday at $58.48 while they were above $70 last year.

On a conference call to speak about earnings, Ianniello was joined by recently promoted executives David Nevins, the chief creative officer, and CFO Christina Spade.

"More and more, the combination of powerful outlets and strong, experienced, creative leadership makes the CBS Corp. one of the most attractive homes for talent in the entire entertainment business," Nevins said.

"Our creative success continues to lead to our financial success," Spade added.

Asked by a Wall Street analyst if there are further shifts in management ahead, Ianniello said: "I don't see other significant changes."

In the third quarter, CBS posted higher revenue and operating income in all its segments but one: cable networks. The company attributed the decline to higher programming and advertising costs associated with Who Is America? and Kidding on Showtime, and because last year the quarter included Showtime's distribution of the Floyd Mayweather-Conor McGregor fight.

Spade noted that without the Mayweather-McGregor event, Showtime's quarterly results would have been roughly flat compared with a year earlier.

Ianniello seemed bullish in general, but particularly so when it comes to local advertising ahead of Tuesday's midterm election.

"Political is taking up all the inventory. These next five days, I mean, I think we have a chance to have a record-setting year," he said. That includes, Ianniello added, years in which a president was on the ballot.