CBS revenue rises to $3.4B, but network ad sales slip


CBS today announced its September quarter earnings marked by increases in consolidated revenue and net earnings even while CBS Networks advertising revenue fell slightly.

Quarterly revenue increased 4 percent to $3.4 billion on an EPS of $1.15 (up 31 percent annually). CBS attributed the growth to a 32 percent increase in retransmission revenues and fees from CBS Television Network affiliated stations as well as growth from digital distribution platforms. Meanwhile, content licensing and distribution revenues grew 6 percent driven by growth in domestic television licensing sales.

CBS’s net earnings reached $514 million, up 21 percent from the year-ago quarter, coming out of operating income that rose 6 percent to $798 million.

However, network advertising revenues were down 2 percent for the third quarter. CBS partially blamed the dip on 10 hours of primetime preemptions for Democratic and Republican conventions and the first Presidential debate as well as competition from the 2016 Summer Olympics, while also recognizing a benefit from higher political spending.

In all, Entertainment revenues reached $1.95 billion, up a relatively flat 1 percent. The increase came in part due to 39 percent growth in affiliate and subscription fees, namely higher station affiliation fees and subscription growth for CBS All Access.

In contrast to relatively soft Entertainment revenue, CBS’s Cable Networks segment saw its revenues jump 14 percent to $598 million. The division benefited from higher revenues from the domestic licensing of Showtime original series and growth from Showtime Networks' over-the-top streaming service.

“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,” said CBS CEO Les Moonves in a statement. “This includes content licensing and distribution, which benefited from a 40 percent increase in streaming revenue during the third quarter. It also includes affiliate and subscription fees, where retransmission consent and reverse compensation grew 32 percent during the quarter, and where we continue to see rapid growth in our subscription streaming services, CBS All Access and Showtime OTT. Meanwhile, advertising remains strong and is accelerating here in the fourth quarter as our new upfront pricing kicks in and political spending is ramping up nicely.”

Looking ahead, Moonves said CBS’s upcoming spinoff of its radio business should allow CBS to return more money to shareholders and invest in more original content.