CBS Corp. (CBS:US), owner of the most-watched television network, reported first-quarter revenue that missed analysts’ estimates as advertising slumped amid a tough comparison with last year’s Super Bowl telecast.
Sales fell 4.6 percent to $3.86 billion, New York-based CBS said yesterday in a statement (CBS:US), hurt by a 12 percent drop in ad revenue. Analysts projected $3.92 billion, the average of 23 estimates compiled by Bloomberg.
Buybacks boosted profit, which rose to 78 cents a share, beating analysts’ estimates of 75 cents, after CBS spent $2 billion repurchasing shares. The company sold stock in its outdoor unit during the quarter and accelerated its buybacks. That put a positive sheen on a challenging period.
“This quarter’s results represent a very rare revenue miss for CBS,” Paul Sweeney, a Bloomberg Industries analyst, said in an e-mail. “CBS appears to have been caught up in the soft first-quarter advertising trends we have seen from some other large media companies.”
CBS, controlled by billionaire Sumner Redstone, fell 2.8 percent to $56.38 at 10:16 a.m. in New York. The stock has retreated 9 percent this year through yesterday.
The sale of shares in CBS Outdoor Americas Inc. was part of a decision to turn the business into a real estate investment trust and eventually divest the investment. The actions are giving CBS about $5 billion for buybacks and potential acquisitions.
The company will repurchase $6 billion of its stock this year, executives said on a conference call yesterday.
Net income in the quarter rose 5.6 percent to $468 million from $443 million, or 69 cents a share, a year earlier.
Advertising sales declined to $2.16 billion because of the tough comparison, CBS said. Affiliate and subscription fees increased 9.2 percent from a year earlier, while content and licensing revenue increased 6.4 percent.
(CBS held a conference call yesterday. See Investors/News & Events at www.cbscorporation.com to listen)
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