CBS earnings boosted by political ads, billboard unit spinoff
CBS Corp. surpassed Wall Street projections when it reported third-quarter results that were aided by political advertising and the spinoff of its billboard unit.
The New York broadcasting giant reported a profit of $1.64 billion, or $3.03 a share, up from $494 million, or 80 cents, in the year-earlier period. The big year-over-year jump was the result of a $1.56-billion gain after the company split off its billboard business, formerly known as CBS Outdoor.
Excluding the gain from CBS Outdoor and other one-time items, CBS posted a profit of 74 cents a share. Analysts had predicted earnings of 73 cents a share from continuing operations.
Meanwhile, revenue increased 2% to $3.4 billion, slightly ahead of Wall Street expectations. CBS’ top line during the quarter was boosted by husky advertising rates for “Thursday Night Football” and also a surge of political ads ahead of the midterm election.
“We are still the best game in town,” CBS Chief Executive Leslie Moonves told analysts during a Wednesday conference call. “NFL football has clearly been a great addition to our prime-time lineup.”
Still, the network had to deal with higher programming costs during the quarter compared with the year-earlier period. CBS paid more than $275 million for the rights to eight NFL prime-time games, and much of that was recorded during the third quarter.
The network was also disappointed that many of the contests were blowouts, producing less-than-stellar ratings. On the bright side, the NFL gambit allowed CBS to move other shows around the prime-time schedule and launch new programs.
Advertising revenue was up 2% companywide. Political spending in advance of this week’s elections also helped generate revenue within CBS’ TV and radio station group, with additional campaign dollars expected to boost the current quarter.
CBS Entertainment, which includes the flagship CBS broadcast network, produced 1% higher revenue to $1.9 billion. Operating income declined 22% to $335 million, again weighed down by the NFL football deal.
Cable networks, including Showtime, increased revenue 5% to $624 million, largely attributed to higher licensing fees for syndication sales of Showtime’s original shows. Cable operating income was up 4% to $272 million.
Simon & Schuster book-publishing revenue declined 11% to $199 million. Operating income of $43 million was about flat compared to the year-earlier period.
Local broadcasting revenue rose to 6% to $680 million, with politicians buying plenty of airtime on CBS TV and radio stations. TV station revenue was up 10% while radio airtime sales perked up 2%.
Operating income for the stations increased 18% to $214 million.
CBS shares closed up 51 cents, or 1%, at $52.50 on Wednesday. The company, which is controlled by billionaire Sumner Redstone, released its earnings after the markets closed. Shares continued to gain ground in after-hours trading.
