There’s no obvious surprise in CBS’ Q4 earnings report — and that may help the company to emerge relatively unscathed from an earnings season where Wall Street has soured on traditional media.
The broadcaster reported net earnings of $261 million, down 36.8% vs the year-end period in 2014, on revenues of $3.91 billion, up 6.2%. The top line beat analyst expectations for $3.81 billion. Adjusted earnings at 92 cents a share were right on target.
“We had a terrific fourth quarter, and CBS is now in position to build strong momentum throughout 2016,” CEO Les Moonves says. “Retransmission consent and reverse compensation are set to hit $1 billion in 2016 — a year earlier than expected — and are on pace to surpass $2 billion in 2020. The international market is extremely exciting as well, with demand for our CBS programming higher than ever and new deals that are changing the way we license the Showtime brand overseas. Plus, our new streaming services — CBS All Access, CBSN, and Showtime over the top — are attracting a whole new set of younger viewers on better economic terms. So no matter how quickly the digital world changes — and no matter how viewers want their content — CBS is positioned to succeed.”
At the Entertainment unit, which includes the CBS network, operating income increased 37.2% to $347 million on revenues of $2.46 billion, up 8.9%. The company attributes much of the increase to an 8% jump in network advertising revenues. That reflects “a strong scatter market,” it says — although CBS also had one more NFL game than it had in the 2014 quarter.
Affiliate and subscription fees also were up 45%.
Local Broadcasting, with the company’s TV and radio stations, didn’t have the political ads it enjoyed in 2014. Operating income fell 20.6% to $232 million with revenues of $719 million, down 8.4%.
And Simon & Schuster’s operating income was up 36% to $34 million on revenues of $233 million, up 8.4%. Digital books accounted for 21% of the revenues, with titles including Donald Trump’s Crippled America and Stephen King’s The Bazaar Of Bad Dreams.