CBS Earnings Rise 15% in Q3

Cable Networks' Operating Income Ahead 12% on 4% Revenue Rise

Buoyed by affiliate and subscription fee gains, CBS saw its third-quarter net earnings rise 16% to $391 million, or 65 cents a share, from $338 million, or 50 cents a share, a year ago.

Revenues grew 2% to $3.4 billion in the period.

“The transformation of CBS continues as reflected in these record third-quarter results,” said CEO Leslie Moonves in a statement. “We have taken a number of significant steps during the last several months to execute our strategy and grow the company. These include three major retransmission-consent agreements, an important reverse compensation deal, new international and domestic streaming contracts, and the sale of our two new hit dramas, Vegas and Elementary, into international syndication.

“As we continue to take actions like these, we are increasing our recurring revenue from non-advertising sources and setting ourselves up for even more record results in the future,” Moonves added “Going forward, we will continue to expand the ways we achieve value for our content, and we are confident we will hit our goal of a record 2012 and an even better 2013.”

CBS said its content licensing and distribution revenues rose by 8%. Affiliate and subscription fee revenues rose 12%, as its cable networks grew and its retransmission and reverse compensation payments from affiliates increased.

Advertising revenues were down 3% because of the pre-emption of six nights of primetime because of the political conventions and because of currency rate fluctuations, plus a decline in radio advertising.

Operating income for CBS’ entertainment group, which includes the broadcast network, TV studio, distribution group, and CBS Films, dropped 5% to $384 million because of costs associated with the timing of theatrical film releases. Revenues were up 3%. Ad revenues were down because of competition from the Olympics and political pre-emptions.

Operating income at the cable networks improved 12% to $227 million. Revenues were up 4% to $436 million, because of higher affiliate fee revenue at Showtime Network, CBS Sports Network and Smithsonian Networks.

Local broadcast operating income was up 16% to $213 million because of lower programming and production expenses and lower music royalty costs. Local broadcast revenues rose 1% to $661 million. TV station revenue rose 7% as political advertising rolled in. Radio revenues were down 5%.