CBS 3Q profit grows, matches Wall St. expectations
Broadcaster CBS Corp. grew earnings 26 percent in the third quarter, benefiting from higher ad revenue, sales of reruns of shows like "NCIS: Los Angeles" and pay-per-view boxing.The company denied that a dispute with Time Warner Cable, which resulted in a programming blackout for millions in August, hurt results in the quarter. But an analyst said that the standoff hurt local broadcasting profit."They would have been up if they did not have the Time Warner Cable dispute," said Vijay Jayant, an analyst with ISI Group, a research firm and broker-dealer. "If there was one segment that was a little below our expectations, it was local broadcasting."Even with a strong advertising market, a profit measure for the local broadcasting unit fell to $181 million from $213 million.But the company brushed off any harm from the blackout a conference call with analysts. CEO Les Moonves said the standoff helped pave the way for "dramatic gains" in the fees it is paid by distributors for the right to retransmit local TV station signals to its subscribers.Chief Financial Officer Joseph Ianniello said that in New York, TV station ad revenue was up 10 percent despite the blackout directly affecting its stations there. The blackout also affected Los Angeles and Dallas.Overall, net income in the three months through September rose to $494 million, or 80 cents per share, from $391 million, or 60 cents per share, a year ago.Excluding results from its outdoor billboard ad business in Europe and Asia, which the company sold in September, earnings came to 76 cents per share, matching the expectations of analysts polled by FactSet.Revenue rose 11 percent to $3.63 billion, beating the $3.53 billion analysts expected.Shares of the New York-based company fell $1.12, or 1.9 percent cents to $58.50 in after-hours trading. Shares are up 57 percent in 2013.The advertising business looked solid, with sales up 4 percent to $1.86 billion. Ianniello said in the current quarter through December, the price of last-minute spot ads on the CBS broadcast network was up by a double-digit percentage from a year ago and local TV station last-minute ad prices rose by a high-single-digit percentage.Even so, CBS is trying to minimize the portion of revenue coming from ads to reduce its exposure to economic downturns. It is preparing to spin off its North American outdoor billboard ad business in the first quarter of next year as a publicly traded real estate investment trust and use the proceeds to buy back shares.CBS also benefited in the third quarter from the sale of "NCIS: Los Angeles" reruns to USA Network and from the sale of "The Good Wife" to the Hallmark Channel, Amazon's Prime streaming service and Hulu Plus.Boxer Floyd Mayweather Jr.'s showdown with Saul "Canelo" Alvarez in late September drove higher revenue at its premium pay TV network Showtime.