CBS began 2017 on the right note, as strong ratings for its TV hits and growth in its streaming services helped propel the network to a strong first quarter.
After markets closed Thursday, the broadcast giant reported revenue of $3.34 billion and earnings of $1.04 a share for the three months ended March 31. That compares with the $3.85 billion in revenue and earnings of $1.02 a share CBS reported for the corresponding period last year. Analysts had estimated first quarter revenue of $3.27 billion and earnings of 96 cents a share. CBS has met or exceeded earnings expectations in every period since the first quarter of 2013.
“Our first-quarter results once again demonstrate the strength of our strategy, which is to diversify our revenue mix as we achieve our long-term financial goals,” Les Moonves, CBS Chairman and Chief Executive Officer, said in a statement. “Retransmission consent and reverse compensation led the way in Q1, growing 28 percent. This contributed to a 17 percent increase in our Company’s affiliate and subscription fee revenue, which also benefited from our over-the-top subscription services, CBS All Access and Showtime OTT. In addition, we a had very solid quarter for content licensing and distribution, which was up 16 percent and is poised for continued strength when several of our hit series enter the syndication cycle later this year.”
CBS missed on revenue in the fourth quarter, a big part of which was due to its classification of since-separated CBS Radio as discontinuing operations. Soft NFL ratings and the growth of cord-cutting also took a toll, but the company showed improvement on both lines in its first quarter release.
NFL viewership picked up in the playoffs — although it was still off 6 percent from last year’s postseason — and CBS also showed growth in its streaming services, including flagship CBS All Access. The company reported a robust 28 percent jump in affiliate and subscription revenue, largely a result of higher station affiliation fees and an increase in All Access subscribers, who pay $6 a month for CBS’ full suite of programming, including All Access originals like “The Good Fight.” CBS is also on every major new internet TV platform, from YouTube TV to Hulu’s just-launched live service.
CBS’ stock slid more than 3 percent Wednesday amid a broader selloff in media and entertainment stocks, but its boss didn’t seem overly concerned.
That afternoon at the Milken Global Conference in Beverly Hills, a confident Moonves discussed the importance of having standalone streaming services for people who want CBS but might not necessarily want to shell out for a traditional or skinny bundle.
“We think it’s the wave of the future,” Moonves said, referring to CBS’ internet TV products. “You have to be everywhere.”
He declined, however, to share All Access’ subscriber count, which the company also did not elaborate on in its earnings release. And after yesterday’s dip, the broadcaster’s shares rebounded Thursday, closing up less than 1 percent.
CBS will hold a conference call at 4:30 p.m. ET to discuss its first-quarter earnings.