CBS Tops Estimates on Higher Ad Sales, Affiliate FeesLucas Shaw
CBS Corp. posted fourth-quarter results that beat estimates, buoyed by higher advertising sales and rising fees from both local broadcasters and pay-TV services.
Profit came to 77 cents a share in the quarter, excluding items, the owner of the most-watched TV network said today in a statement. That compared with the 76-cent average of analysts’ estimates. Revenue grew 3.1 percent to $3.68 billion, exceeding projections of $3.65 billion.
CBS, which gets about half of its revenue from advertising sales, bucked the industry and posted a gain for the quarter. The company credited “Thursday Night Football,” which it airs with the NFL Network. The broadcaster and the league have extended their deal for next year.
“What we’d all like to know is what was advertising revenue at CBS excluding the new football broadcast,” said Anthony DiClemente, an analyst with Nomura Securities International Inc. who recommends the stock.
Big media companies including Time Warner Inc. and Walt Disney Co. previously reported lower advertising sales, underscoring the tough climate programmers are confronting. CBS has been negotiating Internet streaming deals and higher fees from pay-TV operators to diversify its income.
While football produced ad gains, it also boosted costs. CBS said operating income before depreciation and amortization fell to $778 million from $808 million a year earlier, the result of expenses for football programming.
DiClemente said rising affiliate fees would offset those higher costs in the future.
CBS, based in New York, airs six of the 10 most-watched programs on broadcast TV, including “NCIS,” “NCIS: New Orleans” and “The Big Bang Theory.”
CBS is holding discussions to license “NCIS” to a subscription streaming service, Chief Executive Officer Les Moonves told analysts on a call. It has already struck a deal for more than 300 episodes of “CSI,” though Moonves didn’t disclose the buyer.
Some investors have been pressing for CBS to reunite with Viacom Inc. The companies, both controlled by billionaire Sumner Redstone, were split nine years ago. Those pushing such a deal include Mario Gabelli’s funds, the second-largest holder of voting stock in both companies, as well as analysts. Moonves said the company was doing well on its own.
“We feel pretty good about ourselves and don’t need any partners,” Moonves said on the call.
The shares rose 3 percent to $59.50 in extended trading after results were announced. CBS rose 1.8 percent to $57.77 at the close in New York and has advanced 4.4 percent this year.
Net income for the quarter fell 12 percent to $413 million, or 79 cents a share, from $470 million, or 76 cents a year earlier, a reflection of the higher programming costs.
The company plans to repurchase $1 billion of its stock during the current quarter.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.