By Lisa Richwine
LOS ANGELES Feb 12 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
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
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
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.