CBS profit jumps 26% with strong ad sales, higher license fees
The CBS television network remains an industry workhorse, pulling the broadcasting company to another record quarter with profits up 26% compared with a year-ago period.
For the quarter ended Sept. 30, CBS Corp. earned $494 million, or 76 cents a share, compared with $391 million, or 59 cents a share, during the third quarter of 2012.
Revenue of $3.6 billion was up 11% compared with the previous-year period.
“CBS has turned in the best third quarter in our history,†CBS Chief Executive Leslie Moonves told analysts Wednesday afternoon during a conference call. “We have had a record-breaking first half.â€
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CBS met Wall Street’s expectations. Financial analysts polled by Thomson Reuters had estimated CBS would earn 76 cents a share during the quarter.
The company did not suffer damage from the month-long distribution battle with Time Warner Cable, which led to a blackout of CBS stations in key markets including Los Angeles, New York and Dallas. Instead, it was Time Warner Cable that took it on the chin, losing more than 300,000 subscribers during the third quarter.
Leverage gained during the Time Warner Cable skirmish will substantially boost the size of retransmission fees that pay TV operators will pay for CBS’ signal, Moonves said.
What’s more, the swelling stream of retransmission and program license fees has helped the company become less reliant on advertising, which is more volatile.
Now, about 50% of the company’s revenue comes from advertising. Several years ago, about three-quarters of CBS’ revenue came from advertisers.
CBS’ entertainment unit, which includes the CBS broadcast network and television studio, generated 12% higher revenue to $1.88 billion for the quarter. Robust network ad sales as well as the syndication sales of “NCIS: Los Angeles†and “The Good Wife†helped boost the top and bottom lines.
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CBS network ad sales were up 13% in the third quarter thanks to a strong summer schedule, which included the breakout hit “Under the Dome,†based on a Stephen King novel. Advertisers also bet on CBS’ fall schedule, which includes the new hit “The Crazy Ones,†with comedian Robin Williams.
Cable networks, which include Showtime Networks and CBS Sports Network, saw revenues jump 37% to $596 million compared with last year. The growth came from a pay-per-view boxing match featuring Floyd Mayweather Jr. and higher licensing revenue for Showtime’s “Dexter.â€
The Simon & Schuster publishing house also showed growth, with revenue up 7% to $224 million for the quarter, reflecting gains in digital book sales, which grew 39% during the quarter. Digital book sales now account for more than a quarter of Simon & Schuster’s revenue.
“Our content is hitting on all cylinders,†Moonves said.
On Sept. 30, the company completed the sale of the company’s billboard business in Europe and Asia for $225 million.
The New York-based company is controlled by billionaire mogul Sumner Redstone, who spoke briefly at the start of the conference call.
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Follow Meg James on Twitter: @MegJamesLAT
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