March 2, 2021

CBS Reports Quarterly Profit More Than Doubled to $395 Million

The company, which owns the CBS broadcast network and the Showtime premium cable network among other assets, posted net income of $395 million in the quarter, up from $150 million in the same quarter last year.

Analysts predict that the strong showing by CBS is likely to be repeated by the other major media companies that will report second-quarter earnings this week and next.

Reassuring investors who have wondered about the strength of the advertising sector at a sour time for the broader economy, Leslie Moonves, the chief executive of CBS Corporation, said there was no comparing the mood of the marketplace now with the period in 2008 when advertisers retreated as the recession sank in.

“We’re not seeing anything like that — like we felt three years ago,” he said, answering an analyst’s question on a conference call Tuesday afternoon.

Describing increased demand for advertising time on CBS shows, Mr. Moonves said the recent end to the NFL lockout was a “big shot in the arm to us and to our advertisers.” CBS begins televising football games late in the third quarter of each year.

Historically, CBS has been the most dependent on advertising revenue of the major media companies. On Tuesday, Mr. Moonves emphasized how the company was “derisking its business model” by diversifying revenue sources. Total revenue for the quarter was $3.59 billion, up from $3.33 billion a year ago.

“CBS is a fundamentally different company today than we were just a few years ago,” he said, referring to the changing mix of revenue.

For the quarter, advertising revenue — still the biggest piece of revenue by far — grew 3 percent to $2.2 billion, while content licensing and distribution revenue grew 21 percent to $889 million. Mr. Moonves said Netflix’s licensing of old CBS shows like “Star Trek” and “Cheers” this year had contributed to the gains.

Last month, the two companies agreed to extend that arrangement to Canada and Latin America, but that was not reflected in the earnings, nor was Amazon’s licensing of old CBS shows, which was announced last week.

Benjamin Swinburne and Micah Nance of Morgan Stanley said Tuesday in a report that the two recent deals “highlight the continued opportunity for content owners to monetize current and library TV inventories.”

Affiliate and subscription fees, another center of growth for CBS and other media companies in recent years, grew 12 percent to $426 million for the quarter. The one segment of CBS to post a decline was publishing, which was down 3 percent to $183 million. CBS said that what it characterized as “strong growth in the sale of more profitable digital content” was offset by lower sales in print.

CBS shares fell 3.7 percent on Tuesday to close at $26.28.

Notably, CBS’s local television and radio stations posted a 2 percent increase in revenue for the quarter over a year ago, even though even-numbered years like 2010, when there is an influx of political spending, typically outperform odd-numbered years.

The increase also occurred despite what Mr. Moonves called a “temporary slowdown in Japanese auto spending” because of the earthquake and tsunami in March. As that spending returns, he said, “we feel very good about this category going forward.”

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