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The lack of a Super Bowl broadcast this year weighed on CBS in the first quarter, sapping advertising sales and sending total revenue down 7 per cent at the US broadcaster.
Net income from continuing operations rose 3 per cent to $454m, or $1.09 a share, from $442m, or 95 cents a share, a year ago. That excluded the charge related to CBS Radio, which is being merged with Entercom Communications. Wall Street had forecast earnings of 96 cents.
Revenue fell 7 per cent to $3.34bn from $3.59bn, but came in ahead of expectations of $3.28bn. In the first quarter of 2016, CBS broadcast the Super Bowl and an additional National Football League playoff game. Excluding those games, the company said revenue rose in the high single digits.
Advertising revenue dropped 23 per cent to $1.6bn. Affiliate and subscription fees rose 17 per cent to $842m. Content licensing and distribution revenue rose 16 per cent to $845m.
“Our first-quarter results once again demonstrate the strength of our strategy, which is to diversify our revenue mix as we achieve our long-term financial goals,” said Les Moonves, chief executive.
Media stocks have taken a hit this week amid concerns over soft US advertising sales and the health of pay-television bundles at a time when a growing number of Americans are “cutting the cord” in favour of online streaming services.
Time Warner, owner of CNN and TBS, and Viacom, whose cable networks include Nickelodeon and MTV, both reported US subscriber declines this week. Analysts at MoffettNathanson estimate that cable and satellite providers lost 732,000 customers in the first quarter – a decrease of 2.4 per cent, the steepest annualised decline on record.
In December, CBS’s controlling shareholders, Sumner and Shari Redstone, called off talks to merge the broadcaster with Viacom, which the Redstone family also controls.
CBS shares rose 1.6 per cent in after-hours trading in New York.