CBS shares are up about 1% in post-market trading after it reported better-than-expected Q1 numbers, complicated by a mix of one-time tax benefits and write-downs.
The network owner reported a net loss of $252 million, down from a $473 million profit in the period last year, on revenues of $3.34 billion, down 6.8%. That’s ahead of the $3.27 billion that Wall Street anticipated. Last year included the Super Bowl and an additional NFL playoff game.
After adjusting for one-time benefits and costs, earnings came in at $1.04 a share. Analysts were looking for 96 cents.
CBS benefited from what it describes as “the resolution of certain state income tax matters.” There also was a $715 million noncash write-down to adjust the carrying value of CBS Radio with the value of the sale agreement it made with Entercom Communications.
“Our first-quarter results once again demonstrate the strength of our strategy, which is to diversify our revenue mix as we achieve our long-term financial goals,” CEO Les Moonves said. “Retransmission consent and reverse compensation led the way in Q1, growing 28%. This contributed to a 17% increase in our company’s affiliate and subscription fee revenue, which also benefited from our over-the-top subscription services, CBS All Access and Showtime OTT.”
He added that he looks forward to the upfront market “where we’re confident advertisers will once again place great value on the No. 1 television network in an increasingly fragmented media landscape.”
Operating income at the Entertainment unit, which includes the broadcast network, fell 11.4% to $398 million, with revenues down 9.3% to $2.25 billion.
CBS said affiliate and subscription fees were up 28%, while content licensing and distribution sales improved 21%.
The company didn’t break out an ad sales number for the network. Companywide ad sales fell 23.1% to $1.6 billion.
At the Cable Networks, led by Showtime, operating income was up 8.8% to $248 million with revenues up 3.4% to $543 million. Here, too, the company attributed the growth to rising prices including at Showtime’s subscription streaming service.
CBS-owned TV stations saw operating profits fall 18% to $123 million with revenues down 8.7% to $409 million.
And the Simon & Schuster publishing unit reported a 7.7% improvement in operating income to $14 million with revenues up 11% to $161 million helped by Tony Robbins’ Unshakeable and Fredrik Backman’s A Man Called Ove.