CBS remains sturdy in the face of a wave of cord-cutting that has wreaked havoc on other network owners, as the broadcast giant reported big jump in second-quarter revenue as it increases its bet on streaming TV.
After markets closed Monday, CBS reported revenue of $3.26 billion and earnings of $1.04 a share for the three months ended June 30. That tops with the $2.98 billion in revenue and earnings of 93 cents a share CBS reported for the corresponding period last year. Analysts had estimated CBS would report revenue of $3.09 billion and earnings of 98 cents a share, on average.
“CBS delivered outstanding second quarter results while continuing to take a number of steps to achieve our longterm financial goals,” CBS Chairman and CEO Les Moonves said in a statement accompanying the earnings. “First, we had a terrific upfront with gains in pricing and volume, including more and more deals that better reflect how people are watching our programming on a delayed basis. In addition, we took significant steps during the quarter to grow our affiliate fees from both traditional and ‘skinny’ bundles.”
Moonves also mentioned the significant investment CBS has made in its subscription products, CBS All Access and Showtime OTT, which he said are on track to exceed 4 million subscribers combined by the end of the year. He also announced that All Access will be available in Canada during the first half of 2018.
“So, 2017 is turning out to be a great year for the CBS Corporation even without the Super Bowl and political spending that we had in the prior year,” Moonves said.
A big year-over-year increase in content licensing and affiliate fees buoyed CBS’ quarter, and even with the lack of election-related commercials, ad revenue was also slightly up year-over-year.
However, its broadcast channel has also faced questions about its relative lack of diversity after failing to reach a deal with two Asian-American actors on “Hawaii Five-O” and not picking up any fall shows with female leads. At the Television Critics Association event in Beverly Hills last week, senior executive vice president of programming Thom Sherman telling reporters “we are cognizant of the issue.”
And with cord-cutting changing the traditional pay-TV landscape, CBS has made a significant bet on over-the-top streaming services that seems to be working — at least early on.
The broadcast network announced earlier Monday that it has agreed to bring CBS, Showtime, The CW, CBS Sports Network and Pop to AT&T’s DirecTV Now, and CBS has also bolstered All Access, with “Star Trek: Discovery” and a new comedy from Will Ferrell set to debut on the service this fall.
CBS will hold a conference call to discuss the second-quarter report at 4:30 p.m. ET.