By Lisa Richwine
LOS ANGELES, Feb 12 (Reuters) - Media company CBS Corp on Wednesday reported higher profit that beat Wall Street forecasts, announced an accelerated share buyback plan, and raised its projection for revenue from pay television operators.
Shares of CBS jumped 4.6 percent to $64.67 in after-hours trading following the earnings report and the announcement of an accelerated share repurchase of $1.5 billion during the first quarter. That will bring its total buybacks to $2 billion in the quarter, the company said.
CBS Chief Executive Leslie Moonves, on a conference call with analysts, also projected retransmission payments and reverse compensation fees would reach $2 billion annually in 2020, a change from his previous forecast of $1 billion a year in 2017.
Retransmission payments are fees cable and satellite operators pay to carry channels. Reverse compensation refers to fees local affiliates pay to carry CBS programming.
The share buyback and the higher fee projection from Moonves helped drive shares higher, said Needham and Company analyst Laura Martin, who rates CBS a "buy."
"He's going to double a non-ad-driven revenue source," Martin said. "That's very robust."
The media company posted adjusted diluted earnings per share of 78 cents, up 22 percent from a year earlier and beating the average projection of 76 cents from analysts surveyed by Thomson Reuters I/B/E/S. Fourth quarter operating income rose 9 percent to $793 million.
CBS Corp operates CBS, 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 Showtime and other cable channels, the publishing house Simon & Schuster, and radio stations.
Revenue for the quarter grew 6 percent to $3.91 billion, led by a 28 percent increase in content licensing and distribution revenue. Fees from pay TV operators and CBS affiliates rose 7 percent.
Advertising revenue was "relatively even" with the same quarter a year earlier, the company said, at $2.4 billion.
CBS has moved to diversify its revenue away from advertising, in part by selling shows to subscription video on-demand services such as Netflix Inc and Hulu Plus. Moonves said he expected revenue from those types of outlets to rise in 2014 compared with 2013.
CBS is on track to launch an initial public offering this quarter of its Outdoor Americas unit, which sells advertisements on billboards, Moonves said. After the outdoor spinoff, "we will be very close to our goal of a 50/50 split in terms of advertising and non-advertising revenue," he said.
In 2013, 42 percent of CBS revenue came from non-advertising sources, Moonves said.