CBS Corporation has reported its results for the third quarter of 2018, which includes record revenues, due in part to digital initiatives such as its subscription streaming services.
Revenues for Q3 increased 3 percent to $3.26 billion. This was led by 79 percent growth from digital initiatives, including the company’s owned streaming subscription services, and strong gains in retransmission revenues and fees from CBS Television Network-affiliated stations. Advertising revenues were up 14 percent, including revenues of Network 10, which the company acquired in the fourth quarter of 2017, and higher political advertising sales. Content licensing and distribution revenues were up 8 percent.
Operating income decreased 5 percent to $690 million, as a result of “costs relating to corporate matters,” the company said. Adjusted operating income increased 1 percent to $736 million, with the revenue growth being offset by increased investment in content, including a higher number of series produced, and the expansion of the company’s digital initiatives. Net earnings from continuing operations increased 17 percent to $488 million.
Entertainment revenues of $2.15 billion represent a 19 percent increase. Advertising revenues were up 16 percent, reflecting the acquisition of Network 10 in Q4 2017. Entertainment operating income was up 8 percent to $377 million. Cable networks revenues of $569 million decreased 32 percent from the same prior-year period, as a result of Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017. Revenues also included growth from the Showtime subscription streaming service, which was offset by the timing of international licensing sales. Cable networks operating income of $248 million decreased 16 percent, with an increased investment in programming and higher advertising costs, including from the original series premieres of Who Is America? and Kidding on Showtime.
“CBS continues to deliver for our shareholders and execute our long-term growth strategy,” said Joe Ianniello, president and acting CEO of CBS Corporation. “We turned in our best third quarter ever in revenue and EPS, and we remain on track to achieve our 2018 outlook, with revenue growth in the high-single digits and EPS growth in the high teens. At CBS and Showtime, our must-have programming is driving subscriber increases across all platforms, especially on our own direct-to-consumer streaming services, leading to a new record in total subscribers. We are also significantly expanding our suite of over-the-top services through 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. Meanwhile, we’ve just taken another key step in refilling our content pipeline with a new, strong primetime schedule on the CBS Television Network, where we have ownership in five of our six new shows. And at Showtime, we continue to enhance our year-round content slate by adding key programming in entertainment, documentaries, and sports, where we have become the clear industry leader in boxing. Up ahead, 2019 looks to be another outstanding year, with the Super Bowl and Final Four back on CBS, strong gains in retrans and reverse comp, and continued growth in our direct-to-consumer streaming services, which are on track to reach a combined eight million subs, a year ahead of our original projections. Overall, we are confident that our strategy of growing CBS’s leadership position as a global multiplatform premium content company will lead to even greater creative and financial heights in the years to come.”