UPDATE: CBS 4Q Net Up 31% On High-Margin Distribution Deals

CBS Corp. (CBS) on Wednesday reported a 31% jump in fourth-quarter profit, thanks to higher fees from retransmission and streaming contracts, but total revenue declined because of weaker advertising.

Shares of CBS, up 37% over the past year, fell 2.8% to $28.75 after hours.

CBS, which is more dependent on advertising revenue than other media companies, has been trying to diversify its business more, focusing on increasing the money it gets from cable and satellite distributors as well as licensing pacts.

In the fourth quarter, advertising sales fell 4.4% in comparison to strong numbers from the previous year. Licensing and distribution deals declined 4.8% to $758 million, but still accounted for about nearly 20% of overall revenue.

Helping to offset the declines were affiliate and subscription fees, which rose 8% to $460 million. This includes retransmission fees from cable and satellite distributors that carry CBS content; streaming partnerships with digital distributors like Netflix Inc. (NFLX) and Amazon.com Inc. (AMZN); and reverse compensation, or what local stations pay the CBS network to access its programs.

Chief Executive Les Moonves said retransmission fees and reverse compensation are expected to grow by "multiples." In addition, advertising for the 2012 political campaigns "should be very good for us," Moonves added.

CBS reported a profit of $370 million, or 55 cents a share, up from $283 million, or 41 cents a share, a year earlier. Excluding restructuring costs, debt-extinguishment charges and other items, per-share earnings from continuing operations rose to 57 cents from 46 cents.

Revenue declined 3% to $3.78 billion during the fourth quarter, which CBS attributed to higher political advertising in the year-earlier period as well as a second-round syndication sale of "CSI: Crime Scene Investigation," which boosted that quarter's results.

Analysts polled by Thomson Reuters projected profit of 53 cents a share on $3.91 billion in revenue.

-By William Launder, Dow Jones Newswires; 212-416-3412; william.launder@dowjones.com

(Drew Fitzgerald contributed to this report.)

CBS (NYSE:CBS)
Historical Stock Chart
From May 2024 to Jun 2024