CBS 4Q results fall short of expectations
Broadcaster CBS Corp. said Thursday that revenue and earnings grew modestly in the final quarter of the year, helped by the U.S. presidential election and a growing economy.While the results came up short of Wall Street forecasts, analysts said sales of its TV shows to overseas markets and to Web video services would continue to help make the company more resilient to economic swings.Shares dipped 1.2 percent, to $42.43 in after-hours trading after the results were released.Advertising revenue grew 3 percent in the three months through December. The gains were partly offset because last year's licensing revenue bump from the sale of CW network shows to Netflix and Hulu wasn't repeated.Local broadcasting revenue grew less than expected and the Simon & Schuster book publishing business declined faster than analysts were bracing for. The company said, however that rising sales of digital books helped the publisher be more profitable.Net income rose to $393 million, or 60 cents per share, from $370 million, or 55 cents per share, a year earlier.Excluding discontinued operations, adjusted earnings came to 64 cents per share. That was below the 69 cents expected by analysts polled by FactSet.Revenue grew 2 percent to $3.7 billion, below the $3.83 billion analysts were expecting.Brian Wieser, an analyst with Pivotal Research Group, said the quarterly ups and downs were "a wash." The main factor driving CBS' revenue higher is increasing sales of TV shows to overseas entities and to online video providers, he said."The underlying trends driving their cash-flow-generating capacity are no different now than they were a day ago," he said.CBS also said Thursday that it would double its share buyback program by $1 billion in 2013.CBS is preparing to spin off its outdoor billboard business in North America into a real estate investment trust, which should return a high proportion of its cash flow to investors. It is also planning to sell its European outdoor operations.Chief Financial Officer Joe Ianniello said the planned conversion of the Americas outdoor business into a REIT was on track for 2014, but said the company would also entertain offers to buy it outright.Excluding the European operations, the outdoor billboard segment's revenue fell, which CBS blamed on the non-renewal of a contract in Toronto.Macquarie analyst Tim Nollen said two factors were behind the CBS's quarterly miss: A temporary pullback in ad spending among retailers at local TV stations, and the fact that some analysts had not yet adjusted their estimates to reflect that CBS' no longer counts its European outdoor billboard business earnings as part of its results."Some of the items that hurt them in the fourth quarter look like they are not anything more than one-offs," he said. "The growth story in the first quarter still looks very good."