Strong Q2 Results for CBS Corporation

Second-quarter revenues at CBS Corporation rose by 6 percent to reach $3.47 billion, with particularly strong gains in affiliate and subscription revenues, delivering a net profit of $400 million.

The strong results come amid an investigation into sexual harassment allegations leveled against Leslie Moonves, the company’s chairman and CEO, and an ongoing dispute with controlling shareholder National Amusements and Shari Redstone.

“CBS’ strong second quarter puts us firmly on track to deliver the record full-year results we have forecast,” said Moonves. “During the quarter, each of our three revenue types enjoyed solid growth, led by affiliate and subscription fees, where we continue to see healthy gains in both traditional distribution and new digital platforms. Once again, our total subscriber base—including retrans, virtual MVPDs, and our own direct-to-consumer streaming services—continues to grow, and our average rate per sub is increasing as well. In particular, our direct-to-consumer platforms, CBS All Access and Showtime OTT, are greatly exceeding our expectations. Our goal was to have eight million subscribers combined by 2020, and we are now on track to hit that number in 2019. For that reason, and based on our trajectory of growth in these services, we now predict that CBS All Access and Showtime OTT will have 16 million domestic subscribers by 2022. At the same time, we continue to grow in content licensing as we expand our content development and distribution to a host of third-party distributors such as Apple, Netflix, and TBS. In addition, advertising continues to grow as well. And we recently concluded another terrific upfront with solid increases in pricing and volume, including dramatic growth in digital volume, reflecting the power of our programming on the CBS Television Network. Plus, we expect to have strong gains in the back half of the year at our local business with the midterm elections in the fall. Looking ahead, we are set up for continued growth in 2018, and we feel more confident than ever that CBS is uniquely positioned to succeed as a direct-to-consumer global content company.”

Affiliate and subscription revenues were up by 17 percent to $989 million, with retransmission revenues and fees from CBS Television Network-affiliated stations up by 25 percent and digital revenues up 70 percent. Content licensing and distribution revenues were up 4 percent for the quarter to $1.1 billion. Ad revenues inched up 2 percent to $1.3 billion.

By segment, the entertainment business (which includes the CBS network, CBS Television Studios, the recently acquired Network Ten, and CBS Studios International, among other divisions) posted revenues of $2.37 billion, an 8-percent gain. The cable networks (including Showtime and Smithsonian Networks) contributed $591 million.