Record CBS Quarterly Results Marred by Drop in Content Licensing
The company was expected to earn about $1.53 per share on $4.2 billion in revenue, but posted $4 billion in revenue and $1.50 in per-share profit.
Shares of CBS were falling 3 percent after the closing bell Thursday as the company reported quarterly financial results that didn't meet expectations, in part due to weakness in content licensing.
CBS was expected to earn about $1.53 per share on $4.2 billion in revenue but posted $4 billion in revenue and $1.50 in per-share profit.
Despite disappointing Wall Street, CEO Joseph Ianniello boasted of "best-ever quarterly and full-year results."
The exec also disclosed that CBS All Access coupled with the Showtime streaming product have exceeded 8 million subscribers a couple of years ahead of the company's original schedule.
"We are hearing loud and clear that, in addition to watching our content on demand and outside the home, our subscribers love our premium content," Ianniello said.
Growth at the two streamers has been so robust that CBS raised its subscription target for them to 25 million by 2022, while previously it had expected 16 million by then.
In the content licensing and distribution category, CBS reported $1.1 billion in sales, while in the same quarter last year it notched $1.2 billion. The other categories — advertising and affiliate and subscription fees — showed improvement year over year.
As for its four reporting segments, entertainment and cable networks each posted a bit less in operating income, while publishing and local media showed improvement.
CBS said it generated $100 million in political advertising during the quarter. "Political infighting is good for CBS," said CFO Christina Spade, who joined Ianniello on a conference call with analysts on Thursday.
The line from Spade was similar to one spoken by former CEO Les Moonves, who said during an earnings call three years ago that Donald Trump's candidacy for president "may not be good for America, but it's damn good for CBS." Months late, he lamented the remark.
The earnings report comes after the company saw a 13 percent rebound in its shares in January after declines late in 2018 as CBS grappled with the loss of Moonves.
The former CEO is still fighting for a $120 million severance CBS isn't planning to pay him because he was fired for cause after multiple women accused him of sexual abuse.
Moonves recently created three companies under his "Moon Rise" banner and CBS is footing the bill for his office space as part of his separation agreement.
Meanwhile, some shareholders are suing CBS claiming not only that the actions of Moonves harmed the company but that Moonves and other executives were selling their shares because they anticipated that accusations against the then-CEO would become public.
Since the mess with Moonves, there has been a shakeup on the CBS board of directors. "We are 100 percent aligned with our board," Ianniello said Thursday. "They see the returns."