By Maria Armental
CBS Corp. reported a better-than-expected 3% rise in
fourth-quarter revenue on higher ad sales, helped by the broadcast
of Thursday Night Football and ads for the midterm elections.
CBS, the most-watched network for six-straight years, has been
trying to reduce its reliance on advertising to more stable
sources, such as "retransmission" fees. CBS targets $2 billion in
retransmission fees, the money it gets from TV providers to carry
its signals.
Thursday, CBS said that because of its programming, which
includes next year's Super Bowl, it is growing its retransmission
revenue.
"During the quarter, we made significant progress in
retransmission consent and reverse compensation by completing
another round of new deals, each time at higher rates," Chief
Executive Leslie Moonves said in a news release, adding that
affiliate fees also "are growing at a rapid clip."
Shares of CBS rose 2.6% to $59.28 in recent after-hours trading.
Through Thursday's closing, the company's stock had fallen 6.6%
over the past 12 months.
Last year, the New York media company spun off its outdoor
advertising company CBS Outdoor Americas Inc., a deal that in the
last quarter boosted its profit by $1.56 billion. The company,
since renamed Outfront Media Inc., is scheduled to report
fourth-quarter results on Feb. 26.
And as pay TV continues to contract, CBS said last quarter that
it plans to launch a stand-alone streaming-video service for its
premium channel Showtime, following the lead of rival Time Warner
Inc.'s HBO. CBS already offers such service for its broadcast
network and a news service called CBSN.
Overall, CBS reported a profit of $413 million, or 79 cents a
share, down from $470 million, or 76 cents a share, a year ago.
Excluding discontinued operations and other items, the company's
per-share earnings rose to 77 cents from 71 cents.
Revenue increased to $3.68 billion from $3.57 billion.
Analysts surveyed by Thomson Reuters expected 76 cents a share
on $3.65 billion in revenue.
Advertising revenue rose 4% to $2.15 billion, driven by the
broadcast of Thursday Night Football on CBS and ads for the midterm
elections.
Content licensing and distribution revenue slipped 3% to $873
million as the timing of theatrical releases offset higher
television licensing revenues. Affiliate and subscription fees
increased 11% to $601 million on continued increases in
retransmission revenue, fees from CBS-affiliated stations and fee
revenue from cable affiliates.
By segment, revenue from its entertainment segment--which
includes the television network, CBS Television studios and CBS
Films--rose to $2.26 billion from $2.21 billion.
CBS's formula for success includes crime dramas that have broad
appeal. But early Nielsen rating figures suggest trouble ahead,
with ratings for some of its star offerings, including No. 1 drama
"NCIS," declining in key demographics.
The cable networks unit said revenue increased 5% to $499
million from the licensing of Showtime original series as well as
increases in affiliate revenues from higher rates at Showtime
Networks, CBS Sports Network and Smithsonian Networks.
Write to Maria Armental at maria.armental@wsj.com
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