CBS Profit Hurt by Write-Down on Radio Licenses -- 2nd Update

By Chelsey Dulaney and Joe Flint 

CBS Corp. reported stronger-than-expected revenue growth for the fourth quarter and forecast a strong 2016 in both advertising and fees from its content distributors.

"We are set for broad-based strength across all our revenue sources," CBS Chairman and Chief Executive Leslie Moonves told analysts. CBS, he said, will get significant increases in advertising when it sells commercial inventory later this year in advance of the 2016-17 television season.

In addition, the company said it would receive $1 billion this year in fees from pay-TV distributors that carry its local television stations and in compensation from affiliate stations of the CBS broadcast network. That is one year earlier than the company had previously stated.

For the quarter ended Dec. 31, revenue rose to $3.91 billion from $3.68 billion, while analysts had expected $3.8 billion in revenue.

CBS reported a profit of $261 million, or 55 cents a share, down from $413 million, or 79 cents a share, a year earlier. Profit was affected by a $484 million impairment on the FCC licenses for its radio stations and a gain from the sale of an Internet business.

Excluding special items, per-share earnings were 92 cents, matching analysts' expectations. CBS shares fell 2% in after-hours trading.

Mr. Moonves, who last week succeeded Sumner Redstone as chairman of CBS, said there wouldn't be any new strategy to go with his new title. "I think it's going to be business as usual. There is stability here and there is going to be for many years to come," he told analysts. He has said in the past he has a good relationship with Shari Redstone, Mr. Redstone's daughter and a vice chair of the CBS board.

Mr. Redstone, who is in the midst of an ugly legal battle with a former companion over his competency, also stepped down as chairman of Viacom Inc., the parent company of MTV Networks and Paramount Pictures. Longtime Chief Executive Philippe Dauman was voted in as new chairman over the objections of Shari Redstone, who is also on that company's board of directors.

In the latest quarter, CBS's affiliate and subscription fee revenue rose 13%, while content licensing and distribution revenues rose 16%. Advertising revenue ticked up 1% on growth in network advertising.

Cable revenue, which includes contributions from Showtime, CBS Sports Network and Smithsonian Networks, rose 13% to $562 million while local television division revenue fell 8.4% to $719 million because last year was an election year with heavy political advertising.

Entertainment revenue--which includes the broadcast network, CBS Television studios and CBS films--rose 8.8% to $2.46 billion.

CBS's Simon & Schuster book publishing unit also had a strong quarter with revenues of $233 million, an 8% increase from a year ago thanks in part to Donald Trump's "Crippled America." Mr. Moonves said Simon & Schuster has also landed Bruce Springsteen's planned autobiography "Born to Run."

Write to Chelsey Dulaney at [e-mail] and Joe Flint at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 18:45 ET (23:45 GMT)

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