The drop to $698 million is due to lower political ad dollars in this non-election year. The TV network posted an 11% revenue gain to $2 billion, while cable networks were up 16% to $518 million. The broadcaster benefited from licensing its shows to online streaming providers such as Netflix Inc. and from increasing the money it receives from cable and satellite TV distributors to retransmit CBS programming on customers' lineups.
QUARTERLY REPORT
CBS TV Stations’ 2Q Revenue Dips 1%
CBS Corp. on Wednesday reported its highest ever quarterly profits for the second quarter ended June 30, beating the expectations of analysts as the company continues to benefit from the types of fees that are at the center of a dispute with one of its key cable TV distributors.
“Double-digit revenue growth—and the best quarterly profits we’ve ever had — add up to a phenomenal quarter for CBS,” said Leslie Moonves, president-CEO, CBS Corp. “Across the board, CBS’s world-class content continues to drive our results. From Under the Dome, which is changing the face of summer programming on network television, to Ray Donovan, which has refilled the pipeline at Showtime in a big way, new owned content continues to flourish throughout our company.
“As a result, our base business is thriving, and our non-advertising revenue sources are having a bigger impact on our results all the time. Looking ahead, the opportunities to monetize our content are more exciting than ever.
“All of this gives us great confidence in our future,” Moonves added, “and it’s why we announced last week our largest increase ever to our share repurchase program. We remain committed to returning value to our shareholders, and we are certain we can deliver lucrative results for the remainder of this year, next year, and beyond as well.”
Local Broadcasting revenues for the quarter decreased 1% to $698 million from $704 million for the same prior-year period. CBS Television Stations revenues decreased 1%, primarily reflecting lower political advertising. CBS Radio revenues remained flat compared with the same prior-year period, as the benefit of the new CBS Sports Radio network was offset by the impact of radio station dispositions in 2012.
Entertainment division (CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Films and CBS Interactive) revenues of $2.01 billion for the second quarter of 2013 increased 18% from $1.71 billion for the same prior-year period.
BRAND CONNECTIONS
This increase was driven by higher revenues from the licensing of television programming for digital streaming and international syndication, higher advertising revenues, and growth in network affiliation fees.
The company said the increase in advertising revenue reflects 11% growth at the CBS Television Network and increases at CBS Interactive. The timing of the semifinals of the NCAA Tournament contributed seven percentage points to the CBS Television Network’s advertising growth.
Cable Networks division (Showtime Networks, CBS Sports Network, and Smithsonian Networks) revenues increased 16% to $518 million from $446 million for the same prior-year period.
The growth was driven by revenues from a pay-per-view boxing event, higher revenues from the licensing of Showtime original series for digital streaming, and higher affiliate revenues. The increase in affiliate revenues reflects growth in rates and subscriptions at Showtime Networks (which includes Showtime, The Movie Channel, and Flix), CBS Sports Network, and Smithsonian Networks.
The company as a whole reported revenues of $3.70 billion for the second quarter, up 11% from $3.33 billion in the same prior-year period, with increases in each revenue type. The growth was led by a 22% increase in content licensing and distribution revenues, which was driven by licensing agreements for digital streaming and international syndication.
Second-quarter net income grew to $472 million, or 76 cents per share. That’s up from $427 million, or 65 cents per share, a year ago.
Advertising revenues were up 5%, partly from the timing of the semifinals of the NCAA Division I Men’s Basketball Championship (“NCAA Tournament”), which aired during the second quarter in 2013 versus the first quarter in 2012, as well as increases in underlying network advertising.
Affiliate and subscription fee revenues rose 18%, reflecting the impact of a pay-per-view boxing event, and growth from retransmission revenues and fees from CBS Television Network affiliated television stations.
Operating income before depreciation and amortization of $952 million increased 5% in the second quarter of 2013 from $911 million for the same prior-year period, with growth in every operating segment.
Read the company’s report here.
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