CBS misses revenue estimates as AT&T dispute hurts ad sales

The CBS Corporation logo is displayed on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., May 14, 2018. REUTERS/Lucas Jackson/File Photo

(Reuters) - CBS Corp fell short of Wall Street estimates for third-quarter revenue on Tuesday, as a 19-day carriage dispute with AT&T Inc pressured advertising sales during the period.

Shares of CBS and sister company Viacom Inc were down more than 3% in morning trading.

CBS stations went dark for more than 6.5 million DirecTV, DirecTV Now and AT&T U-verse customers in at least 14 U.S. cities, including New York, Los Angeles and Chicago, before CBS and AT&T signed a new content carriage agreement on Aug. 8.

Sales from advertising, which was also hurt by the timing of the broadcast of certain sporting events, fell 6.8% to $1.18 billion in the quarter from a year earlier. The year-ago period was boosted by the 2018 U.S. midterm elections related ads.

The distributor of renowned shows such as “The Twilight Zone” and “NCIS” reported an 11.5% increase in its affiliate revenue, or the fees collected from cable, satellite and online distributors, to $1.12 billion.

CBS is in the process of re-uniting with Viacom to create a larger multi-platform content company and re-make media mogul Sumner Redstone’s U.S. entertainment empire at a time of intensifying streaming wars. The merger would bring in an expansive slate of over 3,600 movies and 140,000 television episodes for ViacomCBS Inc.

Net earnings fell to $319 million, or 85 cents per share, in the third quarter ended Sept. 30, from $488 million, or $1.29 per share, a year earlier.

Adjusted earnings came in at 95 cents per share, beating analysts’ average estimate of 92 cents, according to IBES data from Refinitiv.

CBS posted a 1% rise in revenue to $3.30 billion, but missed analysts’ average estimate of $3.36 billion.

Reporting by Ambhini Aishwarya and Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila