CBS CBS Corp

By Anne Steele and Shalini Ramachandran 

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.

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.

In light of the disappointing NFL game ratings this past season, CBS Chief Executive Les Moonves said his company met with NFL Commissioner Roger Goodell and NFL executives "numerous times" and talked about ideas on "how the product can be more efficient." He called out specifics like how long referees look at replays and said there are ways to speed up the game.

Speaking on a conference call to discuss earnings, Mr. Moonves said CBS is "not planning on cutting advertising" from future NFL telecasts. But he said there are potentially different, more engaging ways to include advertising, which the broadcaster may experiment with in the coming season. He reiterated that the NFL is "still the best content on television."

In the fourth quarter, 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, Mr. 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.

During the quarter, the company offered some former employees the option to receive the current value of their pension benefits in one lump sum, resulting in a one-time charge of $211 million.

Excluding the pension charge and other one-time items, 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. Shares of the media company fell 0.8% to $65.24 in after-hours trading.

Asked on the call about potential mergers and acquisitions in light of AT&T Inc.'s pending $85.4 billion deal to buy Time Warner Inc ., Mr. Moonves said, "Obviously the wireless companies as well as the Silicon Valley companies are all looking at content companies as being very valuable and they're all trying to get into the content business."

He added, however, that CBS feels "very secure about who we are" and feels comfortable as a "self-contained" stand-alone company. He didn't comment on any potential approaches from such companies to CBS.

The Redstone family in December called off an effort to explore a merger between Viacom Inc. and CBS . The family's holding company owns controlling stakes in both.

Separately, Mr. Moonves noted CBS's appetite for making some deals of its own. CBS would be "very interested" in "strategically" buying more local TV stations if the Federal Communications Commission under President Donald Trump lifts a regulatory cap on ownership concentration.

Write to Anne Steele at Anne.Steele@wsj.com and Shalini Ramachandran at shalini.ramachandran@wsj.com

(END) Dow Jones Newswires

February 15, 2017 19:26 ET (00:26 GMT)

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