CBS Reports Highest Q4 Ever in Revenue, Tops Estimates

CBS Reports Highest Q4 Ever in Revenue, Tops Estimates

Network announces plans to buy back $1.5 billion in Class B common Stock in Q1 of 2014

CBS reported its highest fourth-quarter ever on Wednesday, beating estimates earnings per share and revenue estimates in the process. With the strong quarter, the network had its top year in revenue, operating income and earnings per share.

The network also announced plans to buy back $1.5 billion worth of Class B common Stock in Q1 of 2014, following the $364 million it repurchased last quarter.

Industry analysts anticipated Q4 EPS of 0.76; CBS reported 0.78 on Net Earnings of $477 million for the quarter. The EPS increase represents a 22 percent jump from the same time period in the previous fiscal year.

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Revenue of roughly $3.8 billion was anticipated by analysts; CBS topped that mark as well, reporting $3.91 billion in revenue — a six percent increase from prior year.

The revenue growth was led by a 28 percent increase in content licensing and distribution revenues, which was driven by higher domestic and international licensing of television programming. Affiliate and subscription fee revenues grew 7 percent, principally reflecting higher cable affiliate fees, retransmission revenues, and fees from CBS Television Network-affiliated television stations. Advertising revenues were relatively flat.

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“CBS continues to turn in stellar performances year in and year out, and none better than 2013,” Sumner Redstone, executive chairman, CBS Corporation said in an earnings release. “The Company’s strategy of monetizing its content across all platforms is driving our results today, and it will continue to enhance our ability to achieve even greater success in the future.”

“In addition to the solid performance of our base business, our fast-growing, non-advertising revenue streams are playing a bigger and bigger role in our results, and they will continue to do so in the years to come,” added Leslie Moonves, president and chief executive officer, CBS Corporation. “These include the sale of three hit shows — ‘Hawaii Five-0,’ ‘Blue Bloods’ and ‘Elementary’ — into domestic syndication, along with new deals in digital streaming, international syndication, retransmission consent, and reverse compensation.”

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On the subsequent earnings call, Moonves boasted that “Elementary” in particular would bring in more syndication money per episode than any other show ever, thanks to the digital platforms. He also touted “The Good Wife” as Amazon Prime's most-watched TV series in Q4, saying that catch-up viewing has been a strong positive for the network's broadcasts.

The additional 32 hours per year of NFL programming on CBS per the recent ‘Thursday Night Football” announcement was also singled out as a great forward-looking opportunity for the most-watched net. Moonves said he hopes that his network does such a great job hosting the pro football product that the one-year deal turns into a multi-year one.

He also set a lofty goal of $2 billion in retransmission fees and reverse compensation by the year 2020. “We will hit that number regardless of what happens with [Supreme Court Case] Aereo,” the network executive told reporters on the call.