CBS Revenue Declines, Hurt by Lower Ratings
February 15 2017 - 5:59PM
Dow Jones News
By Anne Steele
CBS Corp. swung to a loss in the final quarter of the year and
said the airing of fewer Thursday Night Football games and lower
ratings dragged its revenue lower.
Shares of the media powerhouse fell 1.3% after hours to
$64.43.
Advertising revenue -- the largest contributor to CBS's top line
-- fell 2.8% to $1.8 billion, hurt by three fewer Thursday Night
Football games in the quarter as well as lower ratings from NFL
broadcasts in general. CBS said advertising saw a benefit, however,
from political spending at local television stations.
Content licensing and distribution revenue dropped off 12% to
$893 million; the company said the prior year's quarter was a tough
comparison because of significant licensing sales of NCIS and
Elementary.
Affiliate and subscription fees, meanwhile, shot up 13%, lifted
by growth in retransmission revenue, fees from CBS Television
Network affiliated stations and digital distribution services.
Like other media companies, CBS has been aiming to reduce its
reliance on advertising revenue to reflect shifts in how people
consume television shows and movies. In the latest quarter,
advertising revenue accounted for 51% of the top line, flat from a
year earlier.
The media company, whose holdings include cable networks and
broadcast television stations as well as publisher Simon &
Schuster, also has over-the-top offerings such as CBS All Access
and its Showtime stand-alone streaming service.
On Wednesday, Chief Executive Leslie Moonves said over-the-top
subscription streaming services are contributing "more meaningfully
to our results all the time."
For the December quarter, CBS posted a loss of $113 million, or
26 cents a share, compared with a profit of $261 million, or 55
cents a share, a year earlier. Adjusted earnings rose to $1.11 a
share from 92 cents a year before, topping analysts' estimates by a
penny, according to Thomson Reuters. Overall revenue slipped 1.9%
to $3.52 billion.
Two weeks ago, CBS struck a deal to sell its flagging radio
unit, a business it had been looking to shed for almost a year.
Those results were accounted as discontinued operations in the most
recent quarter.
In December, Sumner Redstone and his daughter Shari Redstone
ended their effort to merge CBS and Viacom Inc., a surprise
reversal that followed resistance from key executives. Redstone
family holding company National Amusements Inc.--which has nearly
80% voting stakes in both media companies -- said after reviewing a
tie-up, "we have concluded that this is not the right time to merge
the companies."
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
February 15, 2017 17:44 ET (22:44 GMT)
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