CBS: Radio Revenue Down 5 Percent Q2 2015

CBS reported better-than-expected quarterly earnings on Wednesday and said it took a $55 million charge for restructuring its TV stations business and radio assets, the latter of which suffered layoffs a few weeks ago.

The company earned 74 cents per share while Wall Street expected 72 cents in the second quarter. Revenue came in at $3.22 billion while analysts expected $3.21 billion, according To The Hollywood Reporter.

Shares of CBS fell 5 percent Wednesday and slipped an additional 2 percent after the closing bell. Media stocks in general were weak Wednesday, a reaction to Disney announcing Tuesday that growth in its cable TV segment would be slower than previously expected.

CEO Leslie Moonves was upbeat during a conference call with analysts Wednesday, and he even upped previous predictions: he said that retransmission and reverse compensation would exceed $2 billion by 2020 as opposed to merely reaching that benchmark, and he said it would reach $1 billion in 2016, about a year ahead of his previous prediction.

During the CBS earnings call:

• CEO Les Moonves conceded "we knew 2015 would be a challenge, just as we know 2016 will be much, much better. The coming election cycle will clearly trump anything we've ever seen before. And despite all the talk that campaigns will be moving their dollars online, and, indeed, some money is going there, POLITICO estimated last week that TV ad spending, TV ad spending for the 2016 campaign will top $4.4 billion. That's $0.5 billion up from 2012 and four times as much as campaigns are expected to spend on digital. Other estimates see political spending coming in even much higher than that. What's clear is that our TV stations are terrifically positioned to capitalize on this, and there will also be a great opportunity for our radio stations to build on the momentum they achieved during last year's midterm elections.
• Moonves also said the company's new radio management team is making the right moves to rejuvenate the business for the digital future. CBS RADIO has huge, huge brands like WFAN in New York and The Score in Chicago that are now able to find new ways to grow by expanding onto digital platforms outside of their own markets.
• Chief Operating Officer Joseph Ianniello ackowledged Local Broadcasting revenue of $654M was down 2%.  Despite the difficult comparison to last year when we had midterm elections, our TV stations were actually up 1%.
• Radio was down 5% from last year when we had nine additional radio stations. As far as advertising categories go, entertainment and financial services were somewhat soft. However, auto, which is our largest category, and healthcare were both up nicely. 
• Local Broadcasting operating income for the quarter was $198 million compared with $215 million last year. He re-terated, CBS has implemented restructuring activities to improve the performance of our local businesses in the quarters ahead.