CBS 3Q earns beats views, revenue comes up short
LOS ANGELES (AP) — Broadcaster CBS Corp. said Wednesday that its third-quarter earnings rose 16 percent from a year ago as a decline in advertising revenue was offset by higher fees from TV distributors.
The New York-based company said ad revenue fell 3 percent due to poor results from CBS Radio and the impact of having programs pre-empted by the Republican and Democratic national conventions. Viewer attention was also drawn away by the London Olympics on NBC.
CBS said the decline in ad revenue and audiences was an aberration that would fix itself in the current quarter, which would also see an unusually high proportion of political ad spending compared to previous presidential elections.
Net income in the three months to Sept. 30 rose to $391 million, or 60 cents per share. That's up from $338 million, or 50 cents per share, a year ago.
Excluding a loss on charges for early debt retirement, adjusted earnings came to 65 cents per share, beating the 61 cents expected by analysts polled by FactSet.
Revenue rose less than 2 percent to $3.42 billion. Analysts expected $3.49 billion.
CEO Les Moonves said in a conference call with analysts that CBS is considering becoming more flexible in its deals with online video providers like Netflix Inc. and Hulu Plus. Until now CBS has only licensed past seasons of shows that were no longer on the air, such as Medium or Numb3rs.
He said that selling past seasons of shows that are airing new episodes on broadcast TV could benefit both audience ratings and the bottom line. He suggested viewers would use online services to catch up on old shows and then tune in when new episodes come on TV. The effect would likely be the same as its practice of selling past seasons of current shows for reruns on other networks and non-CBS TV stations.
"We have come to the conclusion that the streaming of previous seasons of current shows will actually be a benefit," Moonves said. "As we saw with NCIS, which went into syndication, (audience) ratings went up."
Moonves said such online video deals could "have a major impact on our results next year."
CBS shares rose 52 cents to $34.52 in after-hours trading. The stock fell 43 cents to close at $34 in the regular session. Shares hit a 52-week high of $38.32 in September.