CBS Corporation Reports Mixed 3Q 2017 Results

CBS Corporation Thursday reported results for the third quarter of 2017, including record third-quarter adjusted diluted earnings per share ("EPS").

"Our solid third-quarter results demonstrate the way we are shifting our business to capitalize on changing viewing habits," said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation.

Les Moonves

"To that point, during the quarter we saw dramatic growth in our affiliate and subscription fees, including revenue from traditional and skinny bundles as well as over-the-top viewing. Today we have more subscribers at CBS and at Showtime than we did a year ago, and best of all, newer digital platforms are resulting in more revenue per subscriber than traditional ones. So not only are we growing our subs, but we are growing our rates as well. Our over-the-top services had a particularly strong third quarter, thanks to the exciting launch of Star Trek: Discovery on CBS All Access and the Floyd Mayweather/Conor McGregor pay-per-view event on Showtime.

"Of course, premium content is also driving our success at the CBS Television Network, where we are once again #1 this season, with two of the top three new shows, including Young Sheldon, which premiered as the #1 show on television overall. In addition, for the first time, the majority of our upfront deals this fall are based on viewing over a seven day-period, which means that we are now beginning to monetize millions of viewers we were not getting credit for a year ago. So from our new OTT services to the monetization of delayed viewing, and from our burgeoning international business to rapid increases in retrans and reverse comp, we are just beginning to capitalize on significant growth areas for the future."

Highlights:

• Net earnings were $592 million, or $1.46 per share, compared to $478 million, or $1.07 per share a year ago. Net earnings for 3Q 2017 included a non-cash gain of $100 million to increase the value of the CBS radio stations, based on the terms of the deal selling them to Entercom.
• Revenues rose 3% to $3.17 billion. Advertising revenue dipped to $1.106 billion from $1.162 billion a year ago. Affiliate and subscription fees jumped 52%  to $1.145 billion from $753 million, powered by Showtime’s distribution fo the Floyd Mayweather-Conor McGregor pay-per-view fight.
• CBS’s entertainment group, which includes the CBS Broadcast Network reported operating income of $345 million, down 1% from $348 million a year ago. Revenue slid 7% to $1.815 billion from $1.948 billion a year ago.
• Affiliate and subscription fees were up 35% from higher station affiliation fees and growth from CBS All Access and other streaming activities.
• Ad revenue was down 3% partly because of broadcasting fewer Thursday Night Football game.
• Cable network operating income rose 3% to $294 million. Revenues rose 40% to $840 million because of the Mayweather-McGregor fight, but the fight resulted in higher costs as well.