CBS 3Q Profit Rises On Subscriptions, Affiliate Fees As Revenue Dips

• CBS is off 1.8% after hours, following Q3 results where it marked a solid profit beat despite revenues that missed slightly after dipping 3.3% from last year.
• Cable Network revenues took the brunt of the revenue fall, down nearly 16%.
• Revenue by segment: Entertainment, $1.93B (up 1%); Cable Networks, $526M (down 15.7%); Publishing, $203M (up 2%); Local Broadcasting, $638M (down 6.2%).
• Revenue by type: Advertising, $1.48B; Content licensing and distribution, $1.05B; Affiliate and subscription fees, $664M; other, $66M.

Les Moonves

CBS Corporation (CBS) today reported results for the third quarter of 2015, including growth in operating income and record diluted earnings per share.

"During the third quarter, we once again grew our profit and EPS while continuing to increase our investment in content and new distribution services," said Leslie Moonves, President and Chief Executive Officer, CBS Corporation.

"I'm particularly pleased with the gains we're seeing in network advertising, including underlying ad growth in the third quarter and even better pricing here in the fourth. Plus, having sold less inventory in the Upfront, we stand to benefit throughout this television season as we sell our #1 network in a very robust scatter marketplace. Add to that CBS's broadcast of Super Bowl 50 in February and the upcoming presidential election, you can see why we feel very good about advertising in 2016.

"At the same time, our nonadvertising revenue continues to grow even faster, led by retransmission consent and reverse compensation, which were up 50% in the third quarter and are well on their way to exceeding $1 billion next year.

"Looking ahead, as viewers increasingly want to access and pay for content in new ways, we see continued increases in subscription revenue from our in-house over-the-top services at CBS and Showtime, as well as those from outside distribution partners. The good news is, no matter how quickly the industry changes from big bundles to 'skinny' ones to a la carte CBS is positioned to succeed."

Third Quarter 2015 Results

Revenues were $3.26 billion for the third quarter of 2015 compared with $3.37 billion for the same prior-year period, primarily reflecting the timing of television licensing sales and decreases in lower-margin revenues, including the nonrenewal of a sports contract and lower pay-per-view revenues. Meanwhile, revenues for this year's third quarter benefited from growth in underlying network advertising, as well as 9% higher affiliate and subscription fees, including a 50% increase in revenues from retransmission consent and CBS Television Network-affiliated television stations.