CBS CBS Corp

By Benjamin Mullin and Micah Maidenberg 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 13, 2019).

CBS Corp. said profit fell about 35% in the third quarter as the media company continues to ramp up its spending on programming and incurs higher costs ahead of its planned merger with sister company Viacom Inc.

CBS reported on Tuesday a profit of $319 million, or 85 cents a share, compared with $488 million, or $1.29 a share, a year earlier. The company's profit, following adjustments, of 95 cents a share, beat forecasts from analysts polled by FactSet by 4 cents.

Overall, revenue rose 1% from the year earlier to about $3.3 billion. Analysts expected $3.36 billion in revenue.

In August, CBS and Viacom agreed to merge, betting such a deal would help the combined company compete with Walt Disney Co., Netflix Inc. and other entertainment companies. CBS and Viacom are preparing to consolidate their cable programming and digital operations. The combined company will be called ViacomCBS Inc.

Christina Spade, the chief financial officer of CBS, said on an earnings conference call that the company spent about 20% more on programming in the quarter ended Sept. 30 compared with the same time last year, part of a plan to invest in the company's direct-to-consumer streaming services like CBS All Access.

"We have consistently said that the highest and best use of our cash is to invest in our premium content and our direct-to-consumer platforms," Ms. Spade said.

As CBS prepares to merge with Viacom, the company is incurring more corporate costs related to the combination. CBS on Tuesday reported $80 million in costs tied to the merger and other corporate matters, compared with $46 million during the same time last year.

CBS also said its entertainment business, which includes its television network, film unit, streaming services and other assets, generated $2.29 billion in revenue for the third quarter, compared with $2.19 billion last year.

During the call, CBS Acting Chief Executive Joe Ianniello said that the company is planning to launch new channels on Pluto TV, an advertising-supported streaming service owned by Viacom. Those channels, which will be available tomorrow, are an early example of cooperation on the part of the two merging media companies to reach consumers through streaming services.

Mr. Ianniello also said that September was the third-highest month for subscriber growth for CBS All Access. CBS recently struck a deal for the U.S. broadcast rights to the European soccer tournament UEFA Champions League, which will also run on CBS All Access.

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

(END) Dow Jones Newswires

November 13, 2019 02:47 ET (07:47 GMT)

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