CBS Q4 Profit Falls Due to One-Time Items, Even as Revenue Grows

Leslie Moonves

CBS Corp. said its fourth-quarter profit fell 37% owing to one-time charges, even as revenue increased across most divisions in a difficult market.

The New York owner of the CBS broadcast network and Showtime said its net income in the period came to $261 million, or 55 cents per share, compared with $413 million, or 79 cents a share, in the year-earlier period. Results for the period included several items that amounted to $185 million or 39 cents per share.

CBS said revenue in the fourth quarter increased 6% to $3.91 billion owing to higher distribution fees and retransmission payments as well as sales of its content overseas. The company notched a 16% increase in content licensing and distribution revenues. Affiliate and subscription fees grew 13%, and advertising revenues increased 1%, led by an increase of 8% growth in network advertising.

The report is the first the company has made with its chief executive, Leslie Moonves, also holding the post of chairman. Sumner Redstone, the controlling shareholder in CBS and its sister company Viacom, stepped down as executive chair of both companies last week. Speaking during a conference call with investors Thursday, Moonves said Redstone had long given him “free rein” and that he expected no change in corporate strategy now that he held both offices.

Moonves said the company saw a strong market for ad sales in both the first and second quarters. First-quarter sales will be boosted in part by the broadcast of an extra NFL game as well as broadcasts of The Grammys and Super Bowl 50. Moonves said so-called “scatter” advertising, or commercial inventory sold closer to air date, was robust and pricing had increased what CBS had secured in the upfront market. Moonves anticipated more robust demand for advertising in the next upfront, when U.S. networks try to sell the bulk of their ad inventory for the coming TV season.

Moonves also suggested that the company’s CBS Studios could produce additional content for its subscription-video-on-demand product “CBS All Access.” A new “Star Trek’ series that will run only on that service, save for a debut on the CBS broadcast network, is already in the works.

At the company’s entertainment operations, revenue came to $2.46 billion, up 9% from $2.26 billion in the year-earlier period. CBS said ad revenue at its broadcast network rose 8%, owing to a robust market for so-called scatter advertising, or commercial inventory sold closer to air date. Affiliate and subscription fees rose 45%, and content licensing and distribution revenue grew 7%, owing to increased international sales.

CBS said revenues at its cable networks totaled $562 million, up 13% from $499 million in the year-earlier period, owing to international licensing of Showtime original series.

Publishing revenue came to $233 million, up 8% from $215 million in the year-earlier period, owing to growth in print book sales.

CBS said revenue at its local broadcasting operations fell to $719 million from $785 million in the year-earlier period. Local TV stations faced difficult comparisons with the year-earlier period, which contained strong political spending. CBS Radio revenue fell 5%, owing to soft advertising and lower political advertising.


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