UPDATE 2-CBS profit gains from cable fees, licensing of shows
* Third-quarter EPS 60 cents per share
* Company plans more online license deals
* Super Bowl ads nearly sold out
By Lisa Richwine
LOS ANGELES, Nov 7 (Reuters) - CBS Corp topped Wall Street expectations with a higher quarterly profit boosted by more revenue from the licensing of TV shows and fees paid to its cable networks.
The company reported third quarter net earnings of $391 million on Wednesday, up 16 percent from $338 million in the same quarter a year earlier. Adjusted earnings per share reached 65 cents.
Analysts on average had expected 61 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 2 percent to $3.4 billion in the quarter, lifted by an 8 percent gain in licensing and distribution revenue for CBS television shows that include "Elementary" and "Vegas."
The CBS broadcast network is the highest-rated U.S. channel in terms of overall viewers, propelled by hits such as comedy "The Big Bang Theory" and drama "NCIS." The company also operates Showtime and other cable networks.
In recent quarters, CBS has focused on diversifying revenues from its advertising-led business model, in part by selling content to online services such as Netflix Inc.
The company attributed 44 percent of its revenues to sources other than advertising in the third quarter, up from 30 percent "not that long ago," CBS chief executive Leslie Moonves said in a conference call with analysts.
Advertising revenue dropped 3 percent for the quarter.
"We are taking advantage of all the ways people want to consume our content," Moonves added.
To generate added revenues from non-ad sources, Moonves said the company planned more deals with online services that stream TV shows, including for the first time selling past seasons of shows currently airing on the CBS broadcast network and cable channel Showtime. Previous deals involved episodes of shows that had finished their runs on broadcast networks.
The company also said it is ahead of its goal to generate $1 billion annually by 2013 from "retransmission" payments that cable and satellite operators pay to carry their channels and "reverse compensation" payments from local affiliates to carry its programming.
Needham and Co analyst Laura Martin said CBS addressed the two main concerns of investors - the loss of a windfall from political ads this year and the CBS network's slow ratings start.
Executives said revenue from Super Bowl ads will help replace the political ads. They also said the early-season ratings decline had not forced any "make goods," usually lower-priced ads if ratings do not meet guarantees for audience deliveries made to sponsors.
"They did a good job of laying out why the (earnings per share) might continue to grow in 2013," said Martin.
The network has nearly sold out commercials for its Super Bowl coverage on Feb. 3, said Moonves, generating as much as $4 million for some of the 30-second spots.
"It's the world's best promotional platform for our lineup as well," he said.
CBS shares rose 1.3 percent in after-hours trading to $34.45. The shares closed down 1.2 percent at $34 on the New York Stock Exchange.