UPDATE, 3:13 PM: CBS shares rose 2.3% post market. Could have been due to the Q3 numbers. But I’m guessing investors were more impressed by the barrage of digital announcements and optimistic forecasts from management in the call that followed.
PREVIOUS, 1:06 PM: We’ll soon see whether the just-released numbers are enough to satisfy investors who are concerned about CBS’ exposure to the wobbly ad market. But at least the Q3 numbers didn’t start a stampede. If you factor out a $1.56 billion gain from the split-off of CBS Outdoor Americas, the company generated net income of $400 million, down 7.2% from the period last year, on revenues of $3.37 billion, +2%. The top line figure was slightly higher than the $3.32 billion that analysts forecast. Adjusted net earnings at 74 cents per share were a penny ahead of expectations.
“Our third quarter growth reflects the success of our efforts to create and monetize our premium content,” CEO Les Moonves says. “I am particularly pleased with the CBS Television Network’s encouraging start to the fall season, which has reloaded are owned content pipeline in a big way with Madam Secretary, Scorpion, and NCIS: New Orleans along with new owned hits from Showtime and The CW.”
The main Entertainment unit, which includes the CBS TV network and studios, saw a 1% increase in revenues to $1.91 billion. The company attributes that to higher licensing, and affiliate and subscription fees. Advertising for the entire company was up 2% which CBS says was “driven by the broadcast of Thursday Night Football on CBS and political revenues associated with the midterm elections.” But the NFL came with a price: operating income at the Entertainment operation fell 25.4% to $294 million largely due to outlays for the games and $8 million in restructuring costs.
In Cable Networks, dominated by Showtime, revenues were up 5% to $624 million as the company increased its rates and generated more cash from license agreements for its original series. Pay-per-view was down, however in comparison to last year which had the Floyd Mayweather-Canelo Alvarez boxing match, the top grossing PPV event of all time. All told, operating income rose 4.3% to $266 million.
Local stations saw operating income fall 21.7% to $126 million on revenues of $680 million, +6%. The income figure was hurt by a $14 million restructuring charge and $52 million impairment charge from a radio station swap.
And in publishing, which includes Simon & Schuster, operating income was flat at $41 million on revenues of $199 million, negative sign 11.2%.
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