Broadcasting giant CBS Corp. reported 7% lower second-quarter profit due to softer advertising sales, including at its marquee CBS broadcast network, and lower program licensing fees.
For the quarter ended June 30, CBS reported net income of $439 million, or 76 cents a share, compared to $472 million, or 76 cents, for the year-earlier period.
CBS beat Wall Street's earnings expectations. Analysts had been expecting profit of about 71 cents a share.
Revenue slipped 5.4% to $3.2 billion.
Industrywide, television ad sales slowed during the second quarter, and even the top-ranked CBS network was not immune. CBS broadcasts “Big Brother,” “NCIS” and “The Big Bang Theory.”
Also contributing to CBS' lower revenue was a shift of the semifinals of the NCAA men's basketball tournament to the Turner networks, owned by Time Warner. CBS broadcast that round last year.
In addition, CBS had higher foreign syndication sales for its TV programs during the year-ago quarter, making for a tough comparison.
CBS sought to reassure Wall Street that demand for TV commercials has been picking up. CBS also owns local TV stations and thus is expecting to rake in political money during the fall election season.
"Occasionally there is a soft quarter," CBS Corp. Chief Executive Leslie Moonves said. "We are now seeing advertising pacing improve significantly."
CBS will broadcast NFL games on Thursday nights this fall, which should help boost revenue. Still, the NFL package was not cheap -- just under $300 million for the eight games. But the NFL package will allow CBS to shift popular sitcoms to Monday nights from Thursday, helping to strengthen two nights of programming.
Last month, CBS completed the spinoff of its billboard business as part of a diversification designed to make CBS less reliant on advertising revenue, which fluctuates with the economy.
CBS now derives about 50% of its revenue from advertising.
CBS, controlled by billionaire Sumner Redstone, has been buying back shares, and the company announced Thursday that it was increasing its stock-buyback program to $6 billion over the next two years.
The company's entertainment division, which includes the CBS network and television studio, generated $1.84 billion in revenue in the quarter, a decline of 8.5%. Revenue at its cable networks, including Showtime, was down slightly to $516 million.
Local TV and radio station revenue declined nearly 5% to $665 million for the quarter.
The Simon & Schuster book-publishing segment saw its revenue jump nearly 12% to $211 million, driven by higher sales of printed books.
CBS reported its earnings after markets closed. During regular trading, CBS shares fell 75 cents, or 1.3%, to $56.90. Shares slipped in after-hours trading.
CBS stock took a hit during 21st Century Fox's short-lived pursuit of rival Time Warner. CBS was thought to be the logical buyer for CNN, which Fox had planned to divest if it succeeded with its takeover.
Moonves was asked on the earnings call whether CBS still has its eye on CNN.
"It is obviously not going to happen ... and the numbers they were throwing around were silly," Moonves said. "We are pretty happy with our assets."
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