Even increases in retrans couldn’t offset the drop from record political ad revenue compared to fourth quarter 2016.
CBS Corp. on Thursday afternoon reported results for the fourth quarter of 2017 that included Local Media segment revenue of $450 million, down 14.5% from $526 million in the year-earlier fourth quarter.
Local Media operating income of $137 million was a decrease of 36.6% from $216 million. The major culprit was political advertising, which set a record in the fourth quarter of 2016. That drop couldn’t be offset by growth in retransmission consent revenue.
Leslie Moonves, CBS chairman-CEO, said: “I’m very pleased to report that CBS turned in outstanding fourth-quarter results, including double-digit revenue growth and our 32nd consecutive quarter of EPS growth, capping off a very strong year in 2017.”
“The CBS Corp. produces many of the most-valuable programming franchises in the world, reaching more viewers than anyone else. This gives us a tremendous advantage as streaming becomes more central to our distribution strategy. As a result, we now have nearly five million subscribers at CBS All Access and Showtime OTT combined.
“When you add this to our retrans and skinny bundle subscribers, our total subscriber base continues to grow at an accelerated pace. With the backdrop of this changing business model, and the completed separation of our radio business during the fourth quarter, we now have even greater visibility into our operations.
“Specifically, we expect 2018 to be another strong year for the CBS Corp., with revenue growth in the high-single digits and EPS growth in the high teens from the record $4.40 we’re reporting to you today. So, we feel very good about the growth path before us, and we continue to have great confidence in our ability to deliver for our shareholders.”
Entertainment segment revenues (which include CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive and CBS Films) were $2.8 billion, up 17.7% from 4Q 2016.
Cable Networks segment revenues totaled $547 million, up 9.1%.
For the company overall, revenues grew 11% to a record $3.92 billion from $3.52 billion in the fourth quarter of 2016.
Affiliate and subscription fee revenues were up 20%, led by 31% growth in retransmission revenues and fees from CBS Television Network affiliated stations as well as growth from digital initiatives, including the company’s owned streaming subscription services.
Content licensing and distribution revenues grew 33% to $1.2 billion, driven by strong growth from both domestic and international licensing sales.
Operating income for the quarter was $343 million compared with $484 million for the prior-year period.
Net earnings from continuing operations were $40 million for the fourth quarter of 2017 compared with $271 million for the same quarter last year.
Read the company’s report here.