CBS said third-quarter profit rose largely on strength in revenue from affiliate and subscription fees, a testament to the company’s ongoing efforts to find sources of revenue not related to the advertising that fuels its flagship TV network.
The quarterly report is the first the company has delivered since the ouster of former Chairman and CEO Leslie Moonves in the wake of allegations of sexual harassment levied in two reports in the New Yorker. Moonves has denied the allegations.
CBS said fees related to distribution of its programming and revenues from digital efforts, such as its subscription video-on-demand outlet, CBS All Access, rose 32% in aggregate, helping to boost the company’s overall revenue by 3%, to about $3.26 billion from about $3.17 billion.
CBS said net income from continuing operations in the third quarter came to $488 million, or $1.29 per share, compared with $418 million, or $1.03 per share, a year earlier.
Stripping out one-time items, however, net earnings came to $488 million, or $1.29 a share, compared with $592 million, or $1.46 a share, a year earlier.
In a statement, Joseph Ianniello, the company’s president and acting CEO, said the company’s programming, which includes series such as “Billions” and “The Good Fight,” was “driving subscriber increases across all platforms, citing “the recent launch of ET Live and the pending launches of 10 All Access in Australia and CBSN New York, with more international and local outlets on the way.”
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CBS said operating income for the third quarter fell 5% to $690 million. compared to $729 million in the year-earlier period, citing “a result of costs relating to corporate matters.” The company had been embroiled in a legal battle with its controlling shareholder, National Amusements Inc.. and several top executives have left the company in the wake of Moonves’ departure.
At CBS’ largest unit, the one that includes the CBS television network and its TV stations, revenue increased 19% to of $2.15 billion compared with $1.82 billion for the year-earlier period, CBS said advertising revenues increased 16%, owing largely to its acquisition of Network 10 in Australia in the fourth quarter of 2017.
The company’s cable networks generated revenue of $569 million, tumble of 32% from $840 million in the year period. CBS cited the presence of revenue from Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017 as a reason for the shortfall.
CBS said it intended to roll out a new data offering called “DNA” that would allow advertisers to buy more narrowly defined audiences. Several other media companies have also pursued similar efforts, with Univision, NBCUniversal, Viacom, Fox Networks Group and AT&T’s Turner combining forces to form “Open A.P.,” a consortium that helps marketers define audience segments and make purchases of ad inventory they are most likely to see.
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