CBS reported lower than expected sales in the fourth quarter as weaker National Football League ratings weighed on the US broadcaster’s advertising revenue.
Revenue dipped 2 per cent to $3.52bn from $3.59bn. A 3 per cent drop in advertising sales offset growth in retransmission fees and streaming sales.
A one-time pension settlement charge dragged net income from continuing operations down 46.5 per cent to $271m, or 63 cents a share, from $507m, or $1.07 a share in the same quarter last year. But adjusted earnings per share of $1.11 came in ahead of analysts’ forecast $1.10.
Advertising revenue declined to $1.8bn as the network broadcast three fewer NFL games in the quarter and lower ratings for the games that did air. Political advertising spending at local TV stations did rise, however, thanks to the US election.
A boost in the retransmission fees CBS charges to distributors to carry its channels helped lift affiliate and subscription fee revenues 13 per cent to $770m. Les Moonves, chief executive, said retransmission fees surpassed $1bn this year, “a full year ahead of schedule.” Growth of its All Access and Showtime streaming services also contributed to results, Mr Moonves said.
In December, CBS’s controlling shareholders, Sumner and Shari Redstone, called off talks to merge the broadcaster with Viacom, the struggling owner of Paramount Pictures and MTV that the Redstone family also controls.
That has left Mr Moonves free to focus on strengthening CBS’s position in a media industry that is in upheaval from changes in how content is created, distributed and consumed. CBS has pushed hard into online streaming as it looks to capture the attention of younger viewers in the age of Netflix and YouTube. Its All Access service, launched two years ago, allows viewers to watch live and on-demand television shows over the internet without a cable or satellite subscription. It now has rights to stream some NFL games and is developing exclusive programming for the service, including a new Star Trek series and a spin-off of the hit drama The Good Wife.
CBS has also been shedding non-television assets. Earlier this month, the company said it would merge its 89-year-old radio business with Entercom Communications, creating the country’s second-largest radio station owner by revenue. The deal is structured to be tax-free to CBS and its shareholders, who are expected own 72 per cent of the combined company once the deal is completed.
Shares fell 1.1 per cent in afterhours trading in New York