With Fewer Stations, CBS Radio Is Down 7 Percent

CBS reported quarterly earnings and sales on Thursday that topped analysts' expectations, as rising affiliate and subscription fees offset sluggishness in licensing and distribution, according to CNBC.

CBS posted first-quarter earnings of 78 cents per share, up from 77 cents a year earlier. Revenue totaled $3.5 billion, down slightly from $3.57 billion as local broadcast ad sales took a hit.

Analysts had expected the company to report earnings of 75 cents a share on $3.45 billion in revenue, according to a consensus estimate from Thomson Reuters.

"CBS turned in another quarter of record EPS, and our investment in world-class content will lay the foundation to drive future profits," said Leslie Moonves, CBS president and CEO, in a release.

The company touted growth in CBS All Access, the over-the-top service it has developed as consumers put a premium on choice and streaming content. All Access has expanded to half of the United States and CBS expects it to reach 75 percent of American households by the end of the year.

Higher rates drove an 11 percent jump in affiliate and subscription fees from a year earlier. But content licensing and distribution revenues dropped 4 percent.

Les Moonves

Entertainment sales, the company's largest segment declined to $2.26 billion in the quarter. Ad sales fell to $1.78 billion from $1.87 billion in the year-earlier period.

According to the LA Times, the CBS broadcast network is expected to finish the 2014-15 TV season in first place in number of viewers. It will mark the seventh consecutive year that CBS finishes the season as the nation's most-watched TV network.

The strength is expected to help CBS negotiate increases in its commercial rates with advertisers for the upcoming TV season. CBS also will broadcast the 2016 NFL championship Super Bowl, another selling point.

"I'm very confident that we will lead the marketplace in pricing and volume," CBS Corp. Chief Executive Leslie Moonves told Wall Street analysts Thursday during a conference call to discuss CBS first-quarter earnings.

Industrywide, major media companies have been grappling with declines in advertising revenue as marketers spread their ad allocations between traditional media, including TV networks, and Internet and mobile outlets.

CBS was no exception as its advertising sales fell 5% during its first quarter of 2015. Radio stations felt the biggest sting -- they were down 7%.

However, the CBS broadcast network bucked the trend as its advertising revenue increased 1% compared with the year-earlier period, Chief Operating Officer Joseph Ianniello said.

Ianniello reminded analysts that CBS now has nine fewer radio stations in its portfolio following the radio station swap with Beasley last fall.

He added, "In addition, the harsh weather that hit Boston, New York, Chicago, Philadelphia and Detroit where we have 40 TV and radio stations contributed to the advertising slowdown that we saw during the quarter, particularly in the retail and entertainment categories. However, we are seeing a pickup across several key advertising categories in Q2."

Moonves acknowledged new Radio President, Andre Fernandez.  Moonves called Fernanadez "an impressive executive". He also commented, "Andre took the reins from a friend and longtime colleague, Dan Mason, who retired last month. Andre has a successful track record as President of a public company portfolio of newspapers, TV and radio stations and digital assets. We look forward to all that he will do to build on our major market strategy and keep radio growing into the future."