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CBS beats earnings expectations, despite slight revenue miss
November 3, 2015 / 9:33 PM / 2 years ago

CBS beats earnings expectations, despite slight revenue miss

(Reuters) - CBS Corp (CBS.N), owner of the most-watched U.S. TV network, beat Wall Street’s earnings expectations, but reported quarterly revenue slightly below analysts’ estimates due to lower advertising sales and content licensing fees.

The company, which owns cable channel Showtime and CBS Sports Networks, radio stations and the Simon & Schuster publishing house, said it expects advertising spending for the Super Bowl and political campaigns will bolster revenue for 2016.

Advertising revenue, which accounted for about 45 percent of its total revenue in the latest quarter, fell 4.3 percent.

The company is trying to rely less on advertising revenue, which can be volatile due to its dependence on popular sporting or political events, and is focusing more on its online subscription streaming services such as CBS All Access.

The company is discussing launching an ad-free version of its All Access service at $9.99, Chief Executive Officer Les Moonves, told analysts on a conference call. The current ad-supported model costs subscribers $5.99.

CBS, home to shows such as “Homeland”, “The Affair” and “NCIS: New Orleans”, said revenue from affiliates and fees from subscriptions together rose 9.2 percent in the third quarter.

Total revenue fell 3.3 percent to $3.26 billion, narrowly missing analysts’ average expectation of $3.27 billion, according to Thomson Reuters I/B/E/S.

Net income from continuing operations rose to $426 million, or 88 cents per share, in the third quarter ended Sept 30, from $72 million, or 13 cents per share, a year earlier.

Analysts on average had estimated earnings of 81 cents per share.

MoffettNathanson LLC analyst Michael Nathanson agreed with the company’s assessment that CBS should have strong advertising revenue in 2016 due to political campaign spending and the Super Bowl.

“It’ll be the first year in three years of operating profit,” Nathanson said.

Up to Tuesday’s close of $48.24, shares of the company have fallen about 13 percent this year. They were up 2 percent in trading after the bell.

Reporting By Jessica Toonkel in New York, Lehar Maan in Bengaluru; Editing by Anil D'Silva and David Gregorio

Our Standards:The Thomson Reuters Trust Principles.
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