CBS Corp. said its second-quarter earnings fell 24% amid
restructuring-related charges and weaker results at its
entertainment and local broadcasting divisions.
Investors likely will be looking for any details during the
company's earnings conference on the launch of Showtime's
stand-alone streaming service last month, which gives consumers the
opportunity to subscribe to the CBS-owned offering without first
having to buy large packages of cable channels.
The move comes as CBS and its rivals pursue new areas of growth
in an era when consumers have been shifting to lower-priced "skinny
packages" or abandoning cable altogether.
Rival HBO, owned by Time Warner Inc., launched a similar service
earlier this year. Earlier Wednesday Time Warner reported
second-quarter earnings that easily topped expectations. However,
the HBO division—typically a Time Warner workhorse---was the only
major unit that didn't post stronger core operating earnings amid
spending related to the streaming service launch.
Overall, CBS reported a profit of $332 million, or 67 cents a
share, down from $439 million, or 76 cents a share, a year earlier.
Excluding restructuring-related charges and other items, per-share
earnings from continuing operations were 74 cents. Revenue
increased 1% to $3.22 billion.
Analysts polled by Thomson Reuters expected per-share profit of
72 cents and revenue of $3.21 billion.
For the latest quarter, CBS's content and licensing revenue
decreased 10% to $815 million, mostly on lower domestic television
licensing revenue. Affiliate and subscription fees grew 28% to $752
million. Advertising revenue declined 3% to $1.59 billion.
In the latest quarter, CBS's entertainment division—which
includes the television network, CBS Television studios and CBS
films—reported revenue fell 2.7% to $1.79 billion, mostly
reflecting the timing of television licensing revenue. Segment
operating earnings declined 23% to $262 million amid revenue
declines and increased spending for programming and digital
distribution initiatives.
Local television division revenue declined 1.7% to $654 million
on lower advertising revenue from the year-earlier period, which
included political spending from the midterm elections. Operating
earnings fell 7.9% to $198 million.
On Tuesday, Walt Disney Co.'s second-quarter earnings conference
call became a forceful defense of cable sports network ESPN's
future. The media giant also gave a weaker outlook for longer-term
earnings growth at its cable business overall.
Viacom is set to release its second-quarter earnings on
Thursday.
Write to Tess Stynes at tess.stynes@wsj.com
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