Wall Street had high expectations for CBS’ Q1 numbers, and the network owner delivered — beating analyst forecasts for both revenues and earnings. That sent shares up 3% in post market trading, on top of the 18% increase since the beginning of this year.
CBS’ net earnings at $473 million were up 20% vs the same period last year on revenues of $3.85 billion, up nearly 10%. Analysts expected the top line to come in at $3.83 billion. Earnings at $1.02 a share were well above expectations for 94 cents. This is the first time quarterly earnings topped $1.
“CBS delivered a spectacular quarter as we continue to execute on our strategy of creating and distributing the content that audiences have to have,” CEO Les Moonves says. “Looking ahead, we are in a very enviable position for this year’s Upfront, given the ongoing strength of our primetime lineup and a robust advertising marketplace. Plus, advertising is poised for even more growth in the back half of the year as political spending ramps up…. It clearly continues to be a terrific time to be a CBS investor.”
The main Entertainment operation, which includes the CBS network and CBS Interactive, saw operating income rise 30% to $449 million with revenues up 14% to $2.59 billion.
With the Super Bowl and one additional NFL game vs early 2015, ad sales increased 49%. If you factor them out, then sales would have been up 12%. Affiliate and subscription fees were up 67%. Licensing and distribution sales were down, though, compared to last year which included sales of NCIS and CSI.
The Cable Networks unit, which includes Showtime, didn’t fare as well: Operating income dropped 9.2% to $228 million with revenues down 2.6% to $525 million. The company says that last year’s numbers included a “significant licensing agreement” with Canada’s Bell Media, and this year included costs around the launch of Showtime’s Billions.
Local Broadcasting, with CBS’ TV and radio stations, enjoyed a 28% boost in operating income to $206 million as a result of belt tightening. Political ads, the Super Bowl, and retransmission consent revenues lifted the top line by 9% to $649 million. The TV stations were up 18% while radio — which Moonves plans to sell — were down 2%.
The Simon & Schuster publishing unit’s operating income rose about 8.3% to $13 million with lower costs while revenues remained flat at $145 million. Top sellers in the quarter included Cassandra Clare’s Lady Midnight: The Dark Artifices and Mary Higgins Clark’s As Time Goes By.