CBS beats expectations but first-quarter revenue falls 4%

CBS Corp. turned in record first-quarter earnings, surpassing analysts’ expectations. However, revenue slipped at the broadcasting giant.

CBS had a tough comparison because the year-earlier period was boosted by CBS’ broadcast of the Super Bowl, which added $280 million in revenue to the company’s top line. But this year, the Super Bowl ran on Fox, not CBS.

“We had a very strong revenue quarter given that we were competing against the Super Bowl. If not for that, our revenue would have been a record,” CBS Chief Executive Leslie Moonves told analysts Thursday on an earnings conference call. “We have begun 2014 in very good shape.”

For the quarter ended March 31, CBS earned $468 million, or 78 cents a share, compared with $443 million, or 73 cents, a year earlier.

Analysts polled by FactSet were expecting earnings of 75 cents a share.

Revenue declined 4% to $3.9 billion.

CBS shares fell in after-hours trading. The company released its earnings shortly after the markets closed.

During regular trading, CBS shares gained $1.36, or 2.4%, to $58.01.

During the first quarter, CBS’ flagship entertainment division, which includes the CBS broadcast network, saw revenue decline 9% to $2.3 billion compared with the year-earlier period. CBS blamed the decline on the absence of the Super Bowl.

A bright spot was a 6% gain in content licensing revenue. But operating income at the entertainment division declined 5% to $457 million.

Revenue at the cable networks division, led by premium cable channel Showtime, climbed 12% to $537 million. The growth was driven by licensing sales of Showtime original series as well as higher carriage fees.

Cable networks’ operating income was up 12% to $259 million.

Revenue was down 11% to $153 million at the Simon & Schuster publishing house. However, operating income was up 8% to $13 million as digital books represented a larger portion of the division’s sales.

In the local broadcasting segment, which includes such local stations as KCBS-TV Channel 2 in Los Angeles and radio station KNX-AM (1070), revenue fell 2% to $626 million. CBS TV stations turned in 5% lower revenue.

Local broadcasting operating income was up 1% to $200 million.

On the conference call with analysts, Moonves promised Wall Street that the CBS broadcast network will again be the market leader in the industry’s all-important spring advertising sales auction called the upfront.

CBS is expected to end the current season as the nation’s most-watched TV network, averaging nearly 11 million viewers each night in prime time.

Broadcast networks are set to next week unveil their new fall schedules to advertisers in New York.

“Our leadership position will continue,” Moonves said.