With 95 cents of adjusted earnings per share for the third quarter of 2019, CBS topped Wall Street’s forecast, but it came up 23% shy of last year’s comparable number.
And though revenue slightly grew (+1% to $3.30 billion) from the comparable quarter in 2018, CBS missed media analysts’ estimates there by $60 million.
Experts expected CBS to report earnings per share of 91 cents on $3.36 billion in revenue for the quarter, according to a consensus compiled by Yahoo Finance.
CBS Corporation’s operating income dropped by 21% year to year on higher content spend, including investments in new Showtime series “City on a Hill” and “On Becoming a God in Central Florida,” and miniseries “The Loudest Voice.”
Affiliate and subscription fee revenues rose from Q3 2018, as did content and licensing. Advertising declined.
Though the all-in revenue mark didn’t work for Wall Street, it was still a third-quarter record for CBS, which is slated to re-merge with Viacom next month.
“We delivered record third-quarter revenues as we continue to increase our investment in our premium content and direct-to-consumer streaming services, which is the cornerstone of our growth strategy,” Joe Ianniello, president and acting CEO of CBS Corporation, said in a statement accompanying the financials. “During the quarter, our direct-to-consumer revenue from CBS All Access and Showtime OTT grew 39% from last year, driven by a strong slate of original programming. Meanwhile, retrans, reverse comp and virtual MVPD revenues grew 18%, and our total affiliate and subscription fees grew 12%, representing more than a third of our overall revenue in Q3.”
“Our content licensing revenue is also growing as we ramp up production of programming for all of our platforms, including five new hit shows that we just launched on the biggest platform in media, the CBS Television Network, which is on track to end the season as the most-watched network for the 12th consecutive year,” he continued.
“Our base business also remains strong, with solid underlying network advertising growth of 2% during the quarter,” Ianniello concluded his remarks. “In addition, here in the fourth quarter we have a terrific programming schedule at Showtime, including returning favorites ‘Shameless’ and ‘Ray Donovan,’ along with a number of exciting new series, such as ‘The L Word: Generation Q.’ So we are building great momentum as we near our merger with Viacom and head into 2020.”
CBS stock closed Monday afternoon at $38.19. The markets reopen at 9:30 a.m. ET this morning.
At 8:30 a.m. ET, CBS executives will host a conference call to discuss the quarter in greater detail. Viacom’s turn to report earnings comes on Thursday.
Surely both will discuss the recent executive shakeup ahead of their realignment.