CBS Q4 Profits Soar on Streaming Deals (Updated)

CBS CEO Les Moonves touts network’s ratings, takes a jab at “American Idol” numbers

Profits at CBS surged 17 percent to $384 million in the fourth quarter of 2011, capping off a year in which its net income nearly doubled, according to its earnings report on Wednesday.

The strong earnings report, which included a new corporate record for earnings per share, is a result of decreases in costs rather than increased revenues.

Revenue in the fourth quarter declined marginally from $3.9 billion to $3.78 billion, missing analyst expectations of $3.91 billion. However, earnings per share jumped from $0.46 to $0.57, besting the analyst forecast of $0.53.

Annual revenue increased just one percent while profits jumped 41 percent to $1.32 billion. The company's adjusted earnings per share of $1.94 set a new record and marked a 74 percent increase over fiscal 2010.

"CBS's strategy of producing and distributing industry-leading content around the world and across multiple platforms continues to pay off," Sumner Redstone, Executive Chairman of CBS Corporation said in a statement.

On the earnings call, Redstone introduced CBS CEO Leslie Moonves as a "genius," which Moonves then described as an "overly kind introduction."

CBS' high earnings came from streaming deals and affiliate and subscription revenues, which are “higher-margin revenues” — meaning costs remained low.

One reason revenues remained flat is that CBS' sports portfolio was not quite as large. It aired the Super Bowl, the most-watched television event in the country, in 2010 but not in 2011.

CBS will feature the game again in 2012, and Moonves predicted advertising rates of $4 million a spot.

Moonves touted the dominance of CBS as compared to the other networks. It owns 14 of the top 20 programs, the top five scripted programs, the top eight dramas, and so on.

And he did go out of his way to jab Fox's "American Idol" for its lower ratings. 

"Big Bang Theory is now beating a previously invincible talent show that happens to air on another network," Moonves said. Hmmm….wonder what that is? 

Given the continued success of CBS, the growing user base for Showtime and ever more streaming deals, CBS predicted a record year in 2012.

As the economy improves and political ad spending ramps up over the year, CBS is "poised to break records in financial metrics across the board,' according to Moonves.