CBS Corp. beat Wall Street expectations for its fourth quarter results as the big broadcaster begins to unwind its radio station business — a divestiture that will make the company less reliant on advertising revenue.
“We turned in another great quarter and another terrific year at the CBS Corp.,” CBS Chief Executive Leslie Moonves told analysts during a Wednesday afternoon conference call. “We feel very secure in who we are.”
CBS owns the nation’s most-watched TV network, with such shows as “60 Minutes,” “NCIS” and “The Big Bang Theory.” The CBS All Access subscription streaming service — a bid to attract consumers who do not want to pay for a bundle of cable TV channels — is growing, and Moonves told analysts the company might buy more TV stations if the Federal Communications Commission relaxes ownership rules, as anticipated.
CBS reported a net loss of $113 million compared with a profit of $261 million in the fourth quarter of 2015. The loss reflected a $211-million charge CBS took because of its decision to offer pension-holders a lump-sum payment rather than monthly payments over time.
CBS also wrote down the value of its radio stations.
Net income from continuing operations declined to $271 million, or 63 cents a share, compared with $507 million, or $1.07 a share, in the fourth quarter of 2015.
Without the one-time items, the company’s adjusted net earnings were up 9% to $476 million compared with $436 million for the fourth quarter of 2015. The company earned $1.11 a share on an adjusted basis — beating analysts’ expectations by a penny.
CBS raked in $3.52 billion in revenue, compared with $3.59 billion for the fourth quarter of 2015, which was boosted with a lucrative international licensing agreement for programs from its Showtime Networks.
In addition, CBS’ revenue was lower because the network televised three fewer “Thursday Night Football” games compared to the previous year period. Advertising revenue was down nearly 3% in the quarter. Weaker NFL ratings contributed to the drag.
Earlier this month, CBS agreed to merge CBS Radio with a subsidiary of Entercom Communications Corp. CBS plans to split off CBS Radio through an exchange offer just prior to the merger. CBS hopes to complete the transaction in the second half of the year.
Sumner Redstone and his family own nearly 80% of the voting shares of CBS and Viacom Inc. In the fourth quarter, the Redstone family abruptly ended the process to explore a merger between the two companies. That decision frees up cash for CBS to make other deals.
CBS shares closed down 9 cents, or less than 1%, to $65.24 in regular trading.