CBS Profit Falls on Lower Ad, Licensing Revenue

CBS Corp. said its second-quarter earnings fell 7% as the television broadcaster was hurt by weaker advertising revenue and lower television licensing revenue.

CBS doubled its stock buyback authorization to $6 billion and raised its quarterly dividend by 25% to 15 cents a share, up by three cents a share.

CBS has benefited from strong ratings relative to peers and the advent of retransmission fees charged to pay-TV companies. CBS also has been able to draw top dollar for syndication of popular shows such as the hit comedy "The Big Bang Theory" domestically. The broadcast company is aiming aimed to ramp up international sales of syndicated content,

However, advertising sales in the industry's advance selling season known as the "upfront" season were disappointing for the coming fall television, as two of the biggest marketers in the U.S., Procter & Gamble Co. and General Motors Co. pulled back on commitments.

CBS Chief Executive Leslie Moonves said the broadcaster's per-share earnings continue to be driven by high-margin, fast-growing revenue streams which stand to become a bigger factor in CBS's growth. Mr. Moonves cited the company's recently completed separation from CBS Outdoor Americas Inc. and a Supreme Court decision that sided with TV broadcasters on whether streaming-video service Aereo Inc. needed permission to air their content.

CBS reported a profit of $439 million, down from $472 million, a year earlier. On a per-share basis, earnings were flat at 76 cents amid fewer shares outstanding.

Excluding items, earnings from continuing operations rose to 78 cents from 75 cents. The adjusted figure excludes CBS Outdoors for both periods and reflects a 45 million reduction in shares outstanding.

Revenue decreased 14% to $3.19 billion.

Analysts polled by Thomson Reuters expected a per-share profit of 71 cents and revenue of $3.24 billion.

Entertainment segment revenue declined 8.6% to $1.84 billion, on lower television licensing revenues reflecting the timing of sales and as the year earlier period included the semifinals of the NCAA Tournament.

Advertising revenue fell 7% to $1.64 billion on softness in the advertising marketplace and the absence of the NCAA semifinals. Content licensing and distribution revenue dropped 9.4% to $903 million.

Subscription and affiliate fees increased 6.7% to $586 million amid higher rates at Showtime Networks, CBS Sports Network, and Smithsonian Networks.

Earlier Thursday, CBS Outdoor said its second-quarter earnings fell 38% as revenue missed expectations and the company was hit by higher overhead and interest expenses.

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