CBS Profit Hurt by Write-Down on Radio Licenses -- 2nd Update
February 11 2016 - 7:00PM
Dow Jones News
By Chelsey Dulaney and Joe Flint
CBS Corp. reported stronger-than-expected revenue growth for the
fourth quarter and forecast a strong 2016 in both advertising and
fees from its content distributors.
"We are set for broad-based strength across all our revenue
sources," CBS Chairman and Chief Executive Leslie Moonves told
analysts. CBS, he said, will get significant increases in
advertising when it sells commercial inventory later this year in
advance of the 2016-17 television season.
In addition, the company said it would receive $1 billion this
year in fees from pay-TV distributors that carry its local
television stations and in compensation from affiliate stations of
the CBS broadcast network. That is one year earlier than the
company had previously stated.
For the quarter ended Dec. 31, revenue rose to $3.91 billion
from $3.68 billion, while analysts had expected $3.8 billion in
revenue.
CBS reported a profit of $261 million, or 55 cents a share, down
from $413 million, or 79 cents a share, a year earlier. Profit was
affected by a $484 million impairment on the FCC licenses for its
radio stations and a gain from the sale of an Internet
business.
Excluding special items, per-share earnings were 92 cents,
matching analysts' expectations. CBS shares fell 2% in after-hours
trading.
Mr. Moonves, who last week succeeded Sumner Redstone as chairman
of CBS, said there wouldn't be any new strategy to go with his new
title. "I think it's going to be business as usual. There is
stability here and there is going to be for many years to come," he
told analysts. He has said in the past he has a good relationship
with Shari Redstone, Mr. Redstone's daughter and a vice chair of
the CBS board.
Mr. Redstone, who is in the midst of an ugly legal battle with a
former companion over his competency, also stepped down as chairman
of Viacom Inc., the parent company of MTV Networks and Paramount
Pictures. Longtime Chief Executive Philippe Dauman was voted in as
new chairman over the objections of Shari Redstone, who is also on
that company's board of directors.
In the latest quarter, CBS's affiliate and subscription fee
revenue rose 13%, while content licensing and distribution revenues
rose 16%. Advertising revenue ticked up 1% on growth in network
advertising.
Cable revenue, which includes contributions from Showtime, CBS
Sports Network and Smithsonian Networks, rose 13% to $562 million
while local television division revenue fell 8.4% to $719 million
because last year was an election year with heavy political
advertising.
Entertainment revenue--which includes the broadcast network, CBS
Television studios and CBS films--rose 8.8% to $2.46 billion.
CBS's Simon & Schuster book publishing unit also had a
strong quarter with revenues of $233 million, an 8% increase from a
year ago thanks in part to Donald Trump's "Crippled America." Mr.
Moonves said Simon & Schuster has also landed Bruce
Springsteen's planned autobiography "Born to Run."
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com and Joe
Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
February 11, 2016 18:45 ET (23:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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