CBS reported fourth-quarter revenues of $3.9 billion, which were up 11% thanks to growth in content licensing, distribution, affiliate and subscription fee revenues.
Content licensing and distribution revenues were up 33% thanks to higher domestic and international licensing sales. Affiliate and subscription fee revenues grew 20% thanks in part to 31% growth in retransmission revenues and fees from CBS Television Network affiliated stations. But advertising revenues fell 3% due to the lack of political advertising that was present in the fourth quarter of 2016.
“The CBS Corporation produces many of the most-valuable programming franchises in the world, reaching more viewers than anyone else,” said CBS CEO Les Moonves in a statement. "This gives us a tremendous advantage as streaming becomes more central to our distribution strategy. As a result, we now have nearly five million subscribers at CBS All Access and Showtime OTT combined. When you add this to our retrans and skinny bundle subscribers, our total subscriber base continues to grow at an accelerated pace. With the backdrop of this changing business model, and the completed separation of our radio business during the fourth quarter, we now have even greater visibility into our operations.”
Despite the revenue growth, CBS’s net earnings from continuing operations came in at $40 million, down from $271 million in the year-ago quarter. The company attributed that decline partly to restructuring charges, charges associated with pension derisking activities, and a charge of $129 million in the fourth quarter of 2017 associated with the enactment of federal tax legislation.
Revenues for CBS’s entertainment segment—which houses the CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, Network Ten, CBS Interactive, and CBS Films—increased 18% to $2.82 billion. Segment operating income rose 25% to $465 million.
Cable networks revenues of $547 million for the fourth quarter of 2017 increased 9%. But operating income fell 8% to $201 million due in part to increased programming costs.
CBS television stations revenues fell 14% to $450 million as advertising declines were partially offset by retrans growth. The segment’s operating income fell 37% to $137 million.