CBS Reports Stellar 1Q Results

CBS Corporation Thursday reported results for the first quarter of 2018, including record first-quarter revenue and all-time quarterly highs in adjusted operating income and adjusted diluted earnings per share.

"CBS' phenomenal first-quarter results once again affirm that we have the right strategy to successfully monetize our premium content now and in the future," said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation.

Les Moonves

"We achieved these record results thanks to the many ways we are delivering our must-have content, including our direct-to-consumer services -- CBS All Access and Showtime OTT -- which continue to grow rapidly and are now contributing meaningful dollars to our bottom line while attracting younger viewers. We are just beginning to reap the benefits from our position as an industry leader in delivering content over-the-top while others are just entering this business. Beyond direct-to-consumer, our Company-wide growth in paying subscribers is an extremely important and unique part of our success.

"Specifically, when you combine our CBS and Showtime subs across traditional MVPDs, virtual MVPDs (aka "skinny bundles"), and direct-to-consumer services, CBS Corporation's subscribers are not only growing, but the growth is also accelerating. And the average rate per sub is increasing strongly as well. Looking ahead, we are confident that the demand for our programming will only increase when we unveil our new primetime lineup for the CBS Television Network later this month.

"In addition, we have a very successful slate of new and returning series at Showtime that continues to drive its rates and subscribers, and we have the midterm elections this fall. All of this is leading to another record year for the CBS Corporation in 2018, and with today's terrific results, we are even more confident in the very strong full-year growth outlook that we laid out three months ago."

First Quarter 2018 Results

• Revenues for the first quarter of 2018 increased 13% to $3.76 billion from $3.34 billion for the same prior-year period, with growth across all of the Company's significant revenue streams. 
• Affiliate and subscription fee revenues were up 16%, led by 25% higher retransmission revenues and fees from CBS Television Network affiliated stations as well as growth from digital initiatives, including the Company's owned streaming subscription services. 
• Content licensing and distribution revenues were up 18%, benefiting from growth from the international licensing of new series as well as the start of renewal periods for licenses of library programming. 
• Advertising revenues increased 8%, which includes the Company's acquisition of Network Ten in the fourth quarter of 2017.
• Operating income for the first quarter of 2018, which included merger and acquisition-related costs of $9 million, increased 6% to $772 million from $726 million for the same prior-year period. Adjusted operating income increased 8% to $781 million from $726 million, reflecting the revenue growth, which was partially offset by a higher investment in programming and digital initiatives.
• Net earnings from continuing operations for the first quarter of 2018 increased 13% to $511 million from $454 million for the same quarter last year. Adjusted net earnings increased 17% to $518 million from $441 million. These increases are mainly a result of the higher operating income.
• Diluted EPS from continuing operations for the first quarter of 2018 increased 21% to $1.32 from $1.09 for the same quarter in 2017. Adjusted diluted EPS increased 26% to $1.34 from $1.06, benefiting from growth in net earnings as well as lower weighted average shares outstanding. During the quarter, the Company repurchased 3.8 million of its shares for $200 million.

Variety reports CBS is under some pressure to demonstrate robust activity at its operations. Shari Redstone, who controls the company via her family’s National Amusements Inc., has asked CBS and her family’s other holding, Viacom, to pursue a merger. Discussions have wavered over price and executive positions in the new company. By showing how CBS is generating new revenue from distributors as well as subscription video, Moonves and his team are making a case for his leadership at present and down the road.