* Profit 50 cents/share vs Wall St view 46 cents/share
* Revenue increases 2 percent to $3.37 billion
* Stock best performing this year of any big media company
By Paul Thomasch
Nov 3 CBS Corp reported stronger
quarterly profit on Thursday as its top-rated schedule of TV
shows helped keep up the flow of advertising, even without the
political spending that boosted last year's results.
Chief Executive Les Moonves could thank a prime-time roster
that is packed with hits "The Big Bang Theory," "The Good Wife"
and "NCIS," putting CBS in the enviable position of
broadcasting nine of the top 10 scripted shows on TV.
A year ago, CBS benefited from big political spending at
its local stations -- which was not the case this time around.
Yet overall advertising sales held steady at $1.9 billion,
thanks largely to the strength of its network programming.
Forecasting a "record-breaking" year in 2012, Moonves
pointed out that political spending should return with the U.S.
"Next year is shaping up to be a very contentious year in
Washington," Moonves said on a conference call. "If we're up at
this point in 2011 without virtually any political advertising,
imagine what we can do with it in '12."
In its third quarter, CBS reported net income of $338
million, or 50 cents a share, up from $317 million, or 46 cents
a share, in the same period a year ago. That surpassed the 46
cents a share analysts on average had expected, according to
Thomson Reuters I/B/E/S.
Revenue rose 2 percent to $3.37 billion.
CBS's TV schedule is central to what Moonves trumpets as
the company's "content chain." It starts with using hit
programs to sell network advertising, extends to syndication
and streaming deals and wraps up fees from the cable
distributors who carry the CBS network.
"Every link of the content chain continues to strengthen,"
Brett Harriss, an analyst with Gabelli & Co, said the
quarter was better on most measures than he expected.
"The outlook for advertising at least in the fourth quarter
is still strong," he said. "If advertising does weaken, we're
not going to see it until the first quarter."
CBS's Moonves sounded unconcerned on the conference call,
saying he saw little to suggest advertisers want to back out of
For the third quarter, revenue at CBS's entertainment
division was steady around $1.6 billion. Revenue was also
stable in publishing and outdoor. Its cable networks division,
which includes Showtime, showed the biggest gain, rising 13
percent to $420 million.
Cable TV also proved a big help to rival media companies.
This week, Comcast Corp , News Corp and Time
Warner Inc each pointed to their cable networks as the
key to stronger quarterly earnings.
But CBS has far outpaced its rivals in the stock market.
Its shares are up 30 percent this year, putting it well ahead
of the Standard & Poor's 500 index and every major media
Its shares closed trade at $24.52, down 43 cents, before
the release of its earnings and its announcement it would
increase its share buyback program by $1.5 billion.
The stock could still have more upside, said Robin
Diedrich, an analyst with Edward Jones, provided political
spending comes through and corporate advertisers keep buying up
"Everyone seems pretty comfortable with advertising," she
said. "That's the song everyone is signing right now."