CBS CBS Corp

By Micah Maidenberg and Benjamin Mullin 

CBS Corp. said first-quarter net profit more than tripled as the Super Bowl helped bolster the media company's advertising results, but it missed revenue expectations amid a weaker performance in its cable networks business.

The company on Thursday also said revenue from its direct-to-consumer streaming services reached a record level, with subscribers to its CBS All Access product and its Showtime OTT streaming service growing 71% from a year earlier.

The advertising gains highlight the importance of live sports for CBS's broadcast operations.

Executives have already started discussing a new deal with the National Football Association, even though its deal with the league runs through 2022. That CBS is already positioning itself so far ahead of its deal's expiration points to the power of NFL content.

The company said advertising revenue rose 18%, driven by the broadcast of the Super Bowl in February on the CBS Television Network. However, revenue in the company's cable networks business declined 3%, due in part to lower programming sales.

Overall, sales increased 11% from a year earlier to $4.17 billion. Analysts expected $4.3 billion, according to FactSet.

Shares fell 1.8% in postmarket trading.

New York-based CBS reported a profit of $1.58 billion, or $4.21 a share, compared with $511 million, or $1.34 a share, a year earlier. The company recorded a tax benefit in the first quarter and a $549 million gain from the sale of CBS Television City in the quarter, both of which pushed earnings higher.

CBS's profit was also propelled by growth from its local media unit, where operating profit increased 17% compared with the same period last year.

After adjustments, CBS earned $1.37 a share, a penny more than what analysts were looking for.

CBS has faced a range of personnel challenges in recent months, including a legal battle with its former top executive, Leslie Moonves, who resigned after facing numerous sexual misconduct accusations. He has denied those charges.

Last month, the company suspended its search for a new leader and said acting Chief Executive Joseph Ianniello would continue in that role through the end of the year.

During an earnings conference call, Mr. Ianniello said the company plans to spend $8 billion on programming in 2019, putting CBS on par with other major networks and direct-to-consumer streaming services.

"The driving force behind our direct-to-consumer services -- and our entire company -- is our premium, must-have content," he said.

Later during the call, CBS Interactive President Jim Lanzone touted the growth of CBS All Access, adding that two-thirds of subscribers are opting to view a limited amount of commercials.

He also said that the vast majority of subscribers to CBS All Access aren't so called cord-cutters, viewers that have abandoned traditional pay-TV. "We definitely don't view it as a zero-sum game," he said.

Mr. Ianniello also said that he expects CBS to continue to benefit from the legalization of sports betting, which has begun on a state-by-state basis since a Supreme Court decision last year struck down a federal law banning the practice.

Write to Micah Maidenberg at micah.maidenberg@wsj.com and Benjamin Mullin at Benjamin.Mullin@wsj.com

(END) Dow Jones Newswires

May 02, 2019 18:29 ET (22:29 GMT)

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