By Yinka Adegoke
May 1 CBS Corp on Tuesday posted
better-than-expected profit driven by healthy advertising growth
and increases in carriage fees at its cable and broadcast
networks, and also a big boost from licensing shows to online
video partners like Netflix Inc.
Chief Executive Les Moonves guaranteed investors that the
flagship network CBS, the number one U.S. broadcaster, would not
only sell the biggest volumes of advertising at this year's
Upfronts but would also have the highest rates -- also known as
Executives said it is already seeing a strong performance at
its local stations thanks to a rebound in advertising from the
automobile and retail sectors.
CBS, which has traditionally had an advertising-led business
model across national and local TV, radio and outdoor
billboards, has focused in recent quarters on diversifying
revenues in an evolving media sector.
That has seen CBS pushing partners for new carriage fee
revenue from cable, satellite and phone TV distributors as well
as from local broadcasters.
The company has also better-positioned itself as a key
content producer with partnerships for new Web platforms like
Netflix and Hulu.
The quarter was boosted by the sale of content to the
digital partners, which Moonves described as "adding meaningful
and high margin dollars" to CBS' bottom line.
Both CBS' Entertainment unit and its cable networks unit
licensed shows to digital partners. While CBS licensed much
older library shows, Showtime licensed more recent former cable
hits like Sleeper Cell and early episodes of Dexter.
"These were great results," said Brett Harriss, an analyst
at Gabelli & Co. "We knew there was streaming revenue coming
this quarter for the Entertainment business but we were
surprised by the digital revenue at cable."
Moonves told investors that his company was having numerous
conversations with digital partners trying to license CBS shows
including potential new entrants like chipmaker Intel Corp
and traditional cable distributors like Comcast Corp
First quarter net income rose to $363 million, or 54 cents a
share, up from $202 million, or 29 cents a share a year ago.
Analysts had on average been expecting profit around 44
cents, according to Thomson Reuters I/B/E/S.
Revenue rose 12 percent to $3.92 billion.
Advertising revenue overall rose by 5 percent.
The quarter was helped by a 16 percent revenue jump at its
flagship broadcast network CBS, which holds the number one spot
in the United States.