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CBS Edges Past Wall Street’s Q2 Earnings Projections as Streaming Revenue Climbs

Network’s sales hit $3.8 billion and increase 10% from the year prior

CBS narrowly edged past Wall Street’s expectations with its second quarter financial performance on Thursday, with the company pointing to continued growth from its streaming business as a key to better-than-expected revenue growth.

CBS reported Q2 revenue of $3.8 billion and adjusted earnings per share of $1.16, topping analyst estimates of $3.7 billion in sales and $1.12 EPS. Revenue increased 10% year-over-year.

“CBS delivered another outstanding quarter as we continue to execute on our long-term growth strategy, which is to invest in our premium content and direct-to-consumer streaming services,” CBS president and acting CEO Joe Ianniello said in a statement. “We achieved double-digit revenue growth in the second quarter, with increases in each of our three key revenue sources. Our direct-to-consumer services, CBS All Access and Showtime, continue to perform strongly, helping fuel a 13% increase in affiliate and subscription fee revenue for the quarter.”

Revenue from subscriptions and affiliate fees climbed from $989 million last year to $1.11 billion during Q2; Advertising sales also grew from $1.33 billion last year to $1.42 billion.

Despite the increased streaming revenue, CBS declined to share an update on how many subscribers All Access and Showtime have. The two services combined to surpass 8 million subscribers during the first quarter.

CBS is expected to spend about $8 billion on content this year, as it looks to fill not only its array of TV channels but also its streaming lineup with new shows.

After climbing about 3.3% to $50.82 per share on Thursday, CBS shares were flat in after-hours trading.

Earlier on Thursday, CBS and AT&T ended their weeks-long carriage fight by agreeing to a new distribution deal. The agreement includes retransmission consent for all 26 CBS-owned stations in 17 markets including New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Atlanta, Tampa, Seattle, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore.

The channels will return to AT&T, DirecTV and its streaming bundle DirecTV Now immediately. Terms of the deal were not disclosed.

Last week, CBS and Viacom reached a “working” agreement on management structure in the increasingly likely event the two companies complete their long-awaited merger. Viacom CEO Bob Bakish would take over as CEO of the newly combined company while  Ianniello, who has served as acting CEO for CBS since Les Moonves’ ouster last September, would be offered an unspecified senior role overseeing brand assets, an individual familiar with the companies told TheWrap.

Viacom reported better-than-expected Q2 revenue on Thursday morning, thanks in part to domestic ad sales increasing for the first time in several years.

CBS will hold a call at 1:30 p.m. PST to discuss its Q2 results.