CBS Corp. (CBS), owner of the most-watched U.S. television network, said second-quarter profit soared, beating analysts’ estimates as sales of reruns and fees from cable TV systems increased.
Net income more than doubled to $395 million, or 58 cents a share, from $150.1 million, or 22 cents, a year earlier, New York-based CBS said today in a statement. That exceeded the 46- cent average estimate of 23 analysts. Sales gained 7.7 percent to $3.59 billion, also topping projections.
CBS is benefiting from higher ad rates, retransmission fees from pay TV systems and revenue from new online outlets for older TV shows, including Amazon.com Inc. (AMZN) and Netflix Inc. (NFLX) The company, home to “CSI: New York” and “Two and a Half Men,” garnered the highest ad-rate increase of any broadcast network for the new prime-time season that starts in September.
CBS, controlled by Chairman Sumner Redstone, fell 97 cents to $26.31 at 3:59 p.m. in New York Stock Exchange composite trading. The stock had gained 43 percent this year before today.
Revenue from rerun sales and new online outlets increased 21 percent, the company said.
Amazon.com signed an agreement with CBS to offer TV shows including “Num3ers” and “Medium” to the subscription service Amazon Prime, the companies said last month. CBS and Netflix announced an agreement in February for shows that include “Dexter” from the company’s Showtime cable network and the “Star Trek” TV series.
Based on new contracts, CBS will raise ad rates by an average of 13 percent to 15 percent for prime-time shows in the new season in September, a person with knowledge of the situation said in July. The network received commitments for more than 80 percent of its inventory, said the person, who wasn’t authorized to speak publicly.
(CBS has scheduled a conference call for 4:30 p.m. New York time at +1-800-575-5790 for U.S. callers and at +1-719-457-2710 for others.)
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