By Lisa Richwine
Feb 14 CBS Corp reported a 6 percent
gain in fourth-quarter profit on Thursday, boosted by political
advertising on its TV networks and higher revenue from cable
But the company's earnings-per-share for October to December
fell short of Wall Street analysts' expectations, and its shares
dipped nearly 1 percent after hours.
Net earnings rose 6.2 percent to $393 million, or 60 cents a
share, from $370 million, or 55 cents a share, in the year-ago
Adjusted earnings of 64 cents was below the 68-cent average
forecast for analysts surveyed by Thomson Reuters I/B/E/S.
Morningstar analyst Michael Corty called the overall results
"pretty strong," despite falling shy of analysts'
earnings-per-share estimates. "The business has a lot of
momentum," he said. "As long as the ad market stays strong,
which it appears to be, CBS should continue to do well."
CBS also announced plans to repurchase an additional $1
billion of its Class B common stock in 2013, a near doubling of
its earlier buyback commitment.
Chief Executive Leslie Moonves said record advertising sales
ahead of the U.S. presidential election in November helped lift
overall revenue 2 percent, to $3.6 billion. Subscription and
affiliate fees at cable networks that include the CBS Sports
Network and Showtime premium channel also climbed.
Content licensing and distribution revenue fell 7 percent
from a year earlier, primarily due to the timing of payments for
online streaming of CBS shows, the company said. In the prior
year, CBS recorded revenue from the initial streaming sale of
programming from The CW network.
Those numbers will improve in the months ahead, Moonves said
as demand for its online content increases. CBS recently signed
deals with Amazon.com Inc, and Moonves said the company
was in talks with online programmer Hulu and chipmaker Intel
Corp, which aims to start a TV service.
"There is fierce competition out there for all our content,"
Moonves told analysts on a conference call. "The marketplace
continues to develop with more and more players all wanting what
Sales of its TV shows and movies to online distributors will
continue CBS's diversification from an advertising-led business
model, Moonves said, predicting that company would reduce its
reliance on ad revenue from about 70 percent a few years ago to
just over 50 percent.
Yearly revenue from streaming contracts brings in "hundreds
of millions of dollars," Chief Financial Officer Joe Ianniello
said. "We haven't cracked $1 billion per year yet, but we are
well on our way," he said.
CBS is the highest-rated U.S. broadcast network in overall
viewers with its stable of hits such as "The Big Bang Theory"
and "NCIS." The company also operates cable networks, the
publishing house Simon & Schuster, and radio stations.
Revenue at the publishing unit declined 6 percent to $215
million as print book sales declined, CBS said.
Earlier on Thursday, CBS said it took a minority stake in
AXS TV, a live events network that is a joint venture between
billionaire Mark Cuban, AEG, Creative Artists Agency and Ryan
Seacrest Media. CBS will provide promotion and content for the
channel, now in 38 million homes.
Like most other broadcasters, CBS saw primetime ratings slip
during the fall TV season compared with a year earlier. Only
Comcast Corp's NBC gained viewers during that time.
CBS ratings have rebounded this quarter, helped by the Super
Bowl and Grammy awards broadcasts.
Moonves said CBS was on track to be the only network to
finish the season with gains in every demographic category,
providing a strong position going into the big "upfront" ad
selling season in the spring.
Ad demand after the election in the "scatter" market "was
the strongest we had seen in all of 2012," Moonves said. Scatter
pricing during the first quarter is up by percentages "in the
teens," Ianniello said.
CBS shares fell 0.8 percent to $42.60 in after-hours
trading, down from their close at $42.94 on the New York Stock