Streaming Services Boost CBS Revenue--Update

By Maria Armental 

CBS Corp.'s investment in content and streaming-services expansion helped deliver better-than-expected revenue growth in its second quarter.

The company, which has been in merger talks with sister company Viacom Inc., said during an earnings call Thursday that it wouldn't comment "on speculation regarding M&A."

Similarly, Viacom made no reference to any talks with CBS when it reported better-than-expected quarterly results on Thursday.

New York-based CBS reported revenue for the quarter rose 9.9% from a year earlier to $3.81 billion. Analysts polled by FactSet expected $3.72 billion.

The company said quarterly profit rose 10% to $440 million, or $1.17 a share. On an adjusted basis, the company reported a profit of $1.16 a share. Analysts surveyed by FactSet anticipated $1.12 a share for both profit and adjusted profit.

The company said subscriptions from direct-to-consumer streaming services -- anchored by CBS All Access and Showtime -- helped drive a 13% increase in affiliate and subscription revenue in the quarter.

Without disclosing actual subscription figures for those services, CBS said it remains on track to reach its goal of 25 million combined subscribers by the end of 2022. The 25 million target doesn't include subscriptions from international services, company officials had said.

On Thursday, company officials said that international expansion remains the biggest opportunity, particularly in direct to consumer services. They said they expect the addition of children's programming to CBS All Access to help grow subscriptions and lower the number of cancellations.

CBS also plans to expand the digital 24-7 news stream CBSN to all major markets to take advantage of the next election cycle, which it expects to be a record year for political spending.

Advertising revenue rose 7% in the second quarter, led by the broadcast of the semifinals and championship game of the NCAA Division I men's basketball tournament, the company said.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

August 08, 2019 18:40 ET (22:40 GMT)

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