CBS Corp. said its first-quarter earnings fell 19% on lower
revenue that was hurt by the airing of fewer National Football
League playoff games and a decline in advertising revenues at its
local broadcasting business.
Shares still rose 1% to $61.85 in recent after-hours trading as
results beat expectations.
Like other media companies, CBS has been aiming to reduce its
reliance on advertising revenue to reflect shifts in how people
consume television shows and movies. Investors likely will be
watching for any details about CBS's plans for an
Internet-delivered version of premium channel Showtime, which will
be similar to Time Warner Inc.'s effort to appeal to a growing
audience of cord-cutters with its online-only version of HBO.
Separately, Executive Chairman Sumner Redstone earlier on
Thursday denied media reports that any decisions had been made
about who would succeed him as chairman of CBS and Viacom Inc. Mr.
Redstone said any such decision would be made by the companies'
boards, and not by any individuals.
He added that after his death, his stakes in the companies will
be overseen by a group of seven trustees. "Until that time, I will
continue to make all such decisions," he stated.
The New York Post on Wednesday reported that Mr. Redstone's
daughter, Shari Redstone, is in-line to succeed her father at CBS
and Viacom, and that her views likely will be supported by a
majority of the trust's directors, citing people close to the
situation.
Mr. Redstone is 91 years old and has made plans for how his
roughly 80% voting stakes in both companies will be managed after
his death. Those interests will pass to Mr. Redstone's
grandchildren and their descendants, and will be managed by a
seven-member trust.
The trust will be comprised of three family members and four
nonfamily members and will include Mr. Redstone's daughter; her son
Tyler Korff; Viacom CEO Philippe Dauman; David Andelman, a CBS
board member; and George Abrams, a longtime Redstone family
attorney.
It is widely expected that CBS CEO Leslie Moonves and Mr. Dauman
would become chairmen of their respective companies after Mr.
Redstone dies, because their contracts stipulated that they won't
report to anyone other than Mr. Redstone.
Mr. Redstone wasn't on CBS's earnings call Thursday.
In the latest quarter, CBS reported that its advertising revenue
fell 4.8% to $1.78 billion. Content licensing and distribution
revenues decreased 4.2% to $1.03 billion, while affiliate and
subscription fees increased 11% to $628 million, driven by growth
in rates.
In the latest quarter, CBS's entertainment division--which
includes the television network, CBS Television studios and CBS
films--reported revenue fell 1.8% to $2.26 billion, from a year
earlier when CBS aired an additional NFL playoff game. Segment
operating earnings decreased 18%, reflecting a higher investment in
sports and entertainment programming.
The cable networks unit--which includes Showtime, CBS Sports
Network and Smithsonian Networks--reported revenue edged up 0.4% to
$539 million and operating earnings dropped 1.2%.
The company touted the strength of its prime-time TV lineup as
the end of the 2014-2015 television draws closer.
"We are set to close the season with four of the top five new
scripted series, all of which we have ownership in and can monetize
in a growing number of ways," Chief Executive Leslie Moonves said
in a news release Thursday. "We will also win the season as the
most-watched network in America, with a solid performance across
all demographics at a time when others are facing ratings
erosion.
"Looking ahead, we will continue to build upon our position of
great strength with a new prime-time lineup that we will announce
next week, and we expect to be No. 1 in the upfront marketplace,"
he stated.
Overall, CBS reported a profit of $394 million, down from $468
million a year earlier. Per-share earnings were flat at 78 cents on
a decrease in shares outstanding. Revenue decreased 2% to $3.5
billion.
Analysts polled by Thomson Reuters expected per-share profit of
75 cents and revenue of $3.45 billion.
Keach Hagey contributed to this article.
Write to Tess Stynes at tess.stynes@wsj.com
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