CBS Tops Q3 Earnings Expectations Helped By Retransmission Consent Fees

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A 32% increase in retransmission fees and a lift in digital revenues helped to raise CBS above analyst expectations for Q3, a quarter when ad sales were hurt by competition with the Olympics.

The company generated $478 million in net earnings, up 12.2% vs the period last year, on revenues of $3.40 billion, up 4.3%. That crossed the $3.34 billion top line that analysts expected.

Adjusted earnings at $1.05 also beat projections for 98 cents — and marked an all-time high, the company says. The adjustment factors out a one-time $47 million tax benefit in the quarter.

CBS shares are up 2.3% in post-market trading.

“CBS is clearly knocking the cover off the ball, including revenue and profit growth across every one of our operating segments,” CEO Les Moonves says.

“With ownership in all of our new fall shows, we have once again positioned our Company to monetize additional content across all platforms for years to come, ” he adds. Advertising is “accelerating” in Q4 helped by new upfront prices and political ads.

The Entertainment unit — which includes the CBS network and studio, CBS Interactive and CBS Films — saw a 1% increase in revenues to $1.95 billion. Although retransmission dollars increased, network ad sales fell 2%. CBS attributes that to 10 hours of preemptions for the political contentions and the first presidential debate, as well as competition from the Rio Olympics.

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The Showtime-led Cable Networks unit saw a 14% increase in revenues to $598 million. The company says that’s partly due to licensing of series including Penny Dreadful and subscriptions at Showtime’s streaming service.

Revenues at the CBS-owned TV stations improved 9% to $409 million, helped by retransmission fees and political ads.

Simon & Sschuster’s publishing operation had an 11% lift on the top line to $226 million helped by Bruce Springsteen’s memoirs Born To Run and Amy Schumer’s The Girl With The Lower Back Tattoo.

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