UPDATE, 2:45 PM: Despite the strong 3Q earnings, some investors are concerned about the lower-than-expected revenues and a slowdown in ad-sales growth from 2Q. But that didn’t stop CEO Les Moonves from his usual cheerleading in his quarterly conference call with analysts: With more digital and retransmission consent deals ahead, as well as polticial ads, “the company is set up for a record-breaking 2012,” he says. He’s confident about the ad market despite signs that the economy might weaken. “It is business as usual,” he says. “Very few people are cancelling us because they know they’ll have to pay more” next year. Moonves says the recent online streaming deal that CW cut with Hulu does not mean that CBS might join Comcast, News Corp, and Disney at the online video venture. CBS co-owns CW with Time Warner, but “CW is a different animal. It appeals to a younger demographic.” Moonves adds that the most important takeaway is that “we got paid a chunk of money. There was no advertising split, which is something we refuse to do.”
Does Moonves miss syndicating Oprah Winfrey’s daytime talk show? Not much. “During the last years (of her show) the amount of our distribution fees went down significantly,” he says. And once she left daytime there was room for Judge Judy and Dr. Phil to grow — two shows that CBS owns. “No knock on Oprah,” says Moonves, “but because of these factors we are going to be in very good shape.” Stations also are paying CBS reverse compensation fees. “There were only a few station groups that we were paying compensation to,” he says. “By the middle of 2012 we will not be paying anybody. … Instead of paying, we’re getting paid. That’s a great place to be.” He wouldn’t say how much CBS will score from retransmission consent and reverse compensation payments next year, but stood by an earlier estimate of $250M, adding “it’ll probably be more than that.”
PREVIOUS, 1:08 PM: CBS also announced that it’s increasing its share repurchasing program by $1.5B — it has already spent $850M from its previous $1.5B authorization. As for 3Q earnings, CBS says it had net income of $338M, up 6.6% vs last year’s 3Q, on revenues of $3.37B, up 2%. Earnings at 50 cents a share beat the 46 cents that analysts expected, although they figured that revenues would come in at $3.43B. The company says that revenues for the Entertainment unit, which includes the CBS network and CBS Films, was up 1% to $1.63B. It cites “the timing of domestic syndication sales” as a challenge while it benefited from new cash from pay TV retransmission consent deals and digital streaming agreements with companies including Netflix. Cable networks, which includes Showtime, were up 14% to $420M, partly due to rate increases. The Simon & Schuster publishing unit was up 1% to $220M, helped by sales of Jaycee Dugard’s A Stolen Life and Dick Cheney’s In My Time. But the company’s local TV and radio stations were down 3% to $656M without last year’s political ads. Outdoor ad sales were up 4% to $477M helped by changes in foreign exchange rates. CBS chief Les Moonves says he is “confident that we will close out 2011 strongly, and look forward to a terrific 2012 in which we will increasingly benefit from online video, retransmission consent, reverse compensation from affiliates, international and local opportunities as well as political advertising that promises to be very robust.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.