CBS Corp., which owns the No. 1 primetime broadcast network, said Thursday second quarter net income soared 27% as higher content licensing fees and distribution revenues from entertainment programming compensated for its sluggish cable network and publishing businesses.
Earnings per share, on an adjusted basis, totaled 93 cents, handily beating 86 cents estimated by analysts who were polled by S&P Global Capital Intelligence.
Net income was $423 million, up from $332 million a year ago.
Total revenue increased 2% to $3.29 billion.
"CBS turned in another terrific quarter, on the way to another outstanding year, as we continue to take advantage of all the growth catalysts before us," CEO Leslie Moonves said in a statement.
Revenue for the entertainment unit, the largest division that runs the namesake TV network and interactive-digital businesses, reported a 9% revenue gain to $1.95 billion. With a roster of highly rated shows, such as 60 Minutes, The Big Bang Theoryand NCIS, CBS' content licensing and distributions revenues grew 19%. The company particularly cited higher international TV licensing revenues from sales of Star Trek library programming.
Affiliate and subscription fees -- received largely from cable and satellite TV distributors for the rights to carry its programming -- climbed 59%. The growth was partly attributed to more subscribers for CBS All Access, a new streaming service that allows "cord-cutters" to pay a monthly fee for its programs live or on demand.
Advertising sales fell 3% due to the sales of internet businesses in China and the fact that the comparable, year-ago figure had ad sales from the broadcast of the NCAA Tournament finals.
The cable networks unit, which operates Showtime, CBS Sports Network and Smithsonian Networks, reported a 13% revenue decline to $536 million. The company blamed it partly on the same prior-year period including revenues from the Floyd Mayweather-Manny Pacquiao boxing event, which was the highest-grossing pay-per-view event of all time. "This boxing event affected the revenue comparison by 24 percentage points," CBS said.
Revenue for the local broadcasting unit, which runs the CBS TV stations it owns and CBS Radio, was down 1% to $647 million. While retransmission fees - paid by cable and satellite TV companies to carry its stations -- rose, advertising sales for TV and local radio declined.
CBS plans to spin off its struggling radio business, which operates 117 stations. Its radio revenue fell 1% during the second quarter. And CBS recorded a $484 million write-down of its radio FCC licenses in the fourth quarter last year.
With sluggish book sales, Simon & Schuster, CBS' publishing unit, generated $187 million in revenue, a 6% decline. Digital sales represented 23% of its total revenue for the quarter. And with costs for producing, selling and storing printed books falling, the unit's operating income rose 4%.
By: Roger Yu (USA Today).
Photo: Forbes.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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