Q3 Net Profit Slips at CBS Corporation

Net earnings at CBS Corporation fell to $319 million on revenues that were 1 percent higher in the third quarter to $3.3 billion.

“We delivered record third-quarter revenues as we continue to increase our investment in our premium content and direct-to-consumer streaming services, which is the cornerstone of our growth strategy,” said Joe Ianniello, president and acting CEO. “During the quarter, our direct-to-consumer revenue from CBS All Access and Showtime OTT grew 39 percent from last year, driven by a strong slate of original programming. Meanwhile, retrans, reverse comp and virtual MVPD revenues grew 18 percent, and our total affiliate and subscription fees grew 12 percent, representing more than a third of our overall revenue in Q3. Our content licensing revenue is also growing as we ramp up production of programming for all of our platforms, including five new hit shows that we just launched on the biggest platform in media, the CBS Television Network, which is on track to end the season as the most-watched network for the 12th consecutive year. Our base business also remains strong, with solid underlying network advertising growth of 2 percent during the quarter. In addition, here in the fourth quarter we have a terrific programming schedule at Showtime. So we are building great momentum as we near our merger with Viacom and head into 2020.”

By segment, entertainment (encompassing the CBS network, CBS Television Studios, CBS Global Distribution Group and Network 10, among others), revenues were up 4 percent to $2.3 billion, led by affiliate and subscription fee revenues (up 22 percent) and content licensing and distribution revenues (up 7 percent). Ad revenues were down 5 percent. Entertainment operating income fell to $302 million as a result of increased investment in content.

The cable networks (Showtime Networks, Pop and Smithsonian Networks) were up 6 percent to $563 million, led by the inclusion of Pop and gains at the Showtime streaming service. Operating income fell to $196 million, again as a result of increased programming costs.

Publishing revenues fell to $217 million and local media revenues were down to $406 million, partly as a result of lower political adverting sales.