CBS reported higher second-quarter income Thursday as distribution revenue jumped.
Net earnings rose 27% to $423 million, or 93 cents a share, from $332 million, or 67 cents, a year ago.
Revenues rose 2% to $3.29 billion. The rise came despite the Mayweather-Pacquiao fight and the NCAA finals a year ago.
Operating income for CBS' entertainment segment, including the broadcast network, rose 34% to $351 million. Revenues were up 9% to $1.95 billion. Affiliate revenues were up 59%, while advertising revenue dropped 3% because of the Final Four moving to Turner. The company said network ad revenues grew at an underlying rate of 2%. Sales from content, including the Star Trek franchise, were up 19%.
Operating income for CBS' cable networks rose 3% to $227 million.
"CBS turned in another terrific quarter, on the way to another outstanding year, as we continue to take advantage of all the growth catalysts before us," said CEO Leslie Moonves. "Our base business is very healthy, including our strongest upfront selling season in years, which will benefit us beginning in late September when the new higher pricing takes effect. At the same time, we continue to build our fast-growing, high-margin revenue streams at a rapid clip. During the quarter, retransmission consent and reverse compensation grew 44% and remain on track to surpass $1 billion in revenue this year. Our over-the-top streaming services, CBS All Access and Showtime OTT, continue to exceed expectations."
On Thursday morning, CBS announced that it was raising its dividend by 20% to 18 cents a share from 15 cents a share. CBS said its directors also approved increasing the amount of money available to buy back shares to $6 billion. CBS had $1 billion available to buy shares.
"We do not think this morning's announcement [about the dividend and buy back] is an indication that earnings will miss tonight," said analyst Marci Ryvicker of Wells Fargo. "It is probably just a timing thing and might as well get the capital returns announcement 'out of the way' so we can focus on the numbers this evening."
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