By Lisa Richwine
May 1 Broadcaster CBS Corp reported a
better-than-expected first-quarter profit, boosted by
advertising during February's Super Bowl telecast and a jump in
revenue from Showtime and its other cable channels.
The company recorded $463 million in net earnings for the
January through March period, a 17.5 percent increase from $394
million a year earlier, CBS said on Wednesday.
Adjusted earnings per share reached 73 cents, up from 59
cents last year. Analysts on average expected the company to
report adjusted earnings per share of 68 cents, according to
Thomson Reuters I/B/E/S.
CBS Corp owns the CBS broadcast network and cable channels
such as Showtime and the CBS Sports Network, and book publisher
Simon & Schuster.
The company's revenue rose 6 percent to a record $4.0
billion in the quarter, CBS said. The Super Bowl, the year's
most-watched program on U.S. television, and other events
including the Grammy awards helped lift advertising revenue by 8
The CBS network, with a stable of hit shows such as "The Big
Bang Theory" and "NCIS," leads rivals in total viewers this
season and has pulled ahead in the 18-to-49 age group coveted by
advertisers. CEO Leslie Moonves predicted the network will
secure price increases in the "high single-digit to low
double-digit" percentages when the network sells ad time during
the big "upfront" sales period that starts in mid-May.
"We are going to enter this year's upfront marketplace in a
very enviable position," Moonves told analysts on a conference
call. Demand for ad time in the "scatter" market, time not sold
in the upfront market, "is even stronger than it was at this
time last year," Moonves added.
For the quarter, cable networks revenue increased 6 percent
as the channels gained subscribers and received higher fees from
cable TV and satellite operators who carry the channels.
Morningstar analyst Michael Corty said CBS beat expectations
with quality content that attracts advertisers while controlling
non-programming costs. Excluding its outdoor advertising
division, "their profitability improved in every division,"
Corty said. "They keep expanding the margins even when the
growth is not that great."
CBS is taking steps to turn its outdoor business in the
Americas into a publicly traded real estate investment trust, or
REIT. Its outdoor advertising businesses in Europe and Asia are
up for sale.
In recent quarters, CBS focused on diversifying revenues
from its advertising-led business model, in part by selling
content to online streaming services such as Netflix Inc
. Revenue from streaming deals rose 19 percent in the
Moonves said he was confident current deals with Netflix and
Amazon.com Inc would be extended beyond their current
terms. The CBS TV studio also is talking to Netflix about the
possibility of producing a show for them, Moonves said.
Shares of CBS hit $47.00 in after-hours trading, up 1.3
percent from their earlier close at $46.40 on the New York Stock