CBS Posts 4Q Profit and Tops Streaming Targets

CBS reported a fourth-quarter profit as advertising and subscription revenues rose.

Net earnings were $561 million, or $1.49 a share, compared to a $41 million loss, or 10 cents a share, a year ago.

Revenue rose 3% to $4 billion.

The company said its direct to consumer streaming businesses—CBS All Access and Showtime—have reached their original goal of gaining 8 million subs by 2020. And the company set a new goal of having 25 million by 2022.

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Advertising revenues rose 7% as record political advertising sales and growth at the CBS Television Network outweighed the loss of Thursday Night Football the previous year.

Affiliate and subscription fee revenues were up 11%. Streaming subscription revenues were up 53%.

At CBS’s Entertainment unit, operating income decreased 6% to $438 million. Revenues were down 1% because of lower content licensing and distribution revenues. Without Thursday Night Football, underlying CBS Network advertising was up 2%.

Cable network operating income was down 7% to $193 million. Revenue rose 8% to $551 million but costs were higher because of investments in programming.

Local media operating income jumped 72% to $239 million. Revenues were up 25% to $561 million because of political ad sales. Retransmission and subscription fees were up 11%.

“CBS delivered our best-ever quarterly and full year results as we continue to position our company for even stronger long-term growth,” said Joe Ianniello, president and acting CEO at CBS.

Ianniello was elevated last year when long-time CBS head Les Moonves was removed. Moonves lost a bid to dilute the controlling shareholders' stake and was accused of sexual harassment and sexual assault by several women.

“Our strategy of creating more of the premium content that audiences want and making it available across new and traditional platforms continues to pay off, driving quarterly increases in subscribers at CBS and Showtime, both consecutively and year over year. In addition, we are generating significant momentum with our direct-to-consumer platforms, which provide a great return on investment and represent one of our most powerful long-term growth drivers," Ianniello said. “In fact, we have now reached 8 million direct-to-consumer subscribers between CBS All Access and Showtime, nearly two years ahead of our original schedule. As a result, we have set a new target of 25 million domestic subs combined from both of these direct-to-consumer services by 2022. All of this success is fueled by the must-have programming we have from across our key established content brands.”

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.