CBS Sets 3Q Earnings Records, Falls Just Short of Revenue Expectations

Company to explore stock buybacks and increased dividend

CBS Corporation set several third-quarter earnings records but fell just short of revenue expectations.

Company CEO Les Moonves said on a conference call with reporters and investors Wednesday that the company would look for opportunities to buy back stock and increase dividend payments. He also acknowledged lower network ratings this fall by saying they were "all over the place" for most networks, but said that the numbers were "atypical." NBC is the only network up overall this season.

Moonves said CBS's ratings would improve, thanks in part to the Super Bowl. He noted that more and more viewers are time-shifting shows, and said people need to stop fixating on overnight ratings that capture only live viewing.

CBS reported revenues of $3.42 billion. Analysts polled by FactSet had expected CBS to earn 61 cents per share on revenue of $3.49 billion, according to The Associated Press.

But adjusting for the exclusion of pretax loss on early extinguishment of debt, adjusted net earnings were 65 cents per diluted share, up 30 percent from the third quarter of 2011.

The company said it set third-quarter records for revenues, net earnings, and adjusted diluted core earnings. It also reported record third-quarter operating income of $771 million, operating income before depreciation and amortization of $898 million, and net earnings of $391 million.

CBS said affiliate and subscription fee revenues rose 12 percent, reflecting growth at Cable Networks, higher retransmission revenues, and fees from CBS Network affiliated television stations.

Advertising revenues were down 3 percent, primarily because of lower advertising for CBS Radio, the impact of foreign exchange rate changes, and pre-emptions for the Republican and Democratic national conventions on six nights of CBS's primetime schedule.

The company said political ads would fuel fourth-quarter ad buys because campaigns had opted to wait until the fourth quarter — starting Oct. 1 — to dump money into ads.

CBS stock was up 1.53 percent in afterhours trading to $34.52 per share.