CBS Says Don’t Ask -- And No One Does on Quarterly Earnings Call
(Bloomberg) -- CBS Corp.’s stock is falling, its board is investigating sexual-harassment allegations against Chief Executive Officer Leslie Moonves and its controlling shareholder is suing the company.
But the analysts who advise investors on the company were more interested in callable bonds and other matters late Thursday. Not one addressed the elephant in the room during a call with management, heeding a request from the company’s head of investor relations.
Moonves, 68, spoke on the call, his first public remarks to investors since being accused of sexually harassing six women. He didn’t address the allegations or his future in opening remarks, enthusing instead about the company’s bright future.
The company, owner of the most-watched TV network, reported sales and profit that beat analysts’ estimates, crediting pay-TV fees and the growth of its All Access and Showtime streaming services. CBS said it would hit its target of 8 million online subscribers by 2019, a year ahead of schedule, and projected those services would reach 16 million by 2022.
While the earnings would normally cheer investors, Moonves’ uncertain future and his legal battle with CBS’s controlling shareholders hang over the company. The board of CBS has begun an investigation into the sex-harassment allegations against Moonves, and has hired two law firms to oversee the probe. The CEO’s name has begun disappearing from nonprofits, websites and other venues -- sometimes at his request.
The board announced the investigation last week, after the New Yorker reported on women who alleged they were harassed by Moonves and said their careers suffered when they refused his advances. The Los Angeles Times reported Thursday that the board knew about allegations several months ago.
Similar allegations have ended the careers of executive across many industries, and the departure of Moonves would deal a blow to CBS. He’s run the company for more than a decade. CBS shares were down about 1 percent in extended trading after the results were announced. They have dropped about 8 percent since the New Yorker report.
Moonves was already in a fight for his job before the allegations. He and his fellow board members took steps to dilute controlling shareholder National Amusements Inc.’s voting control and the matter is now in court. National Amusements, led by Shari Redstone, holds an 80 percent voting stake in CBS and has pushed the company to recombine with Viacom Inc., another family holding.
With Moonves’ future uncertain beyond the next few weeks, analysts asked about negotiations with pay-TV services over the next two years and online video forecasts that extend five years out. New York-based CBS said second-quarter earnings rose to $1.12 a share, beating estimates of $1.11. Revenue grew 6 percent $3.47 billion, exceeding projections of $3.46 billion.
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