As Viacom Merger Looms, CBS’s Sports Coverage Fuels Earnings
As Viacom Deal Looms, CBS’s Sports Coverage Helps Earnings Shine
(Bloomberg) -- Though CBS Corp. investors are more focused on a potential merger with Viacom Inc., the broadcaster delivered better-than-expected sales and earnings, with sports coverage helping boost results.
Second-quarter revenue climbed 9.9% to $3.81 billion, the company said Thursday, well above analysts’ forecasts of $3.71 billion. Adjusted earnings, at $1.16 a share, also topped projections in the period.
CBS’s flagship network was the most-watched TV channel in the U.S. this past season, thanks to a string of sporting events that started with the Super Bowl and included March Madness, the PGA Championship and the Masters. Tiger Woods’s historic victory at the Masters also was carried by CBS.
Another strong quarter gives acting Chief Executive Officer Joseph Ianniello and the CBS board leverage as they negotiate a merger with Viacom, the other media company controlled by the Redstone family.
On the entertainment side, Jordan Peele’s remake of “The Twilight Zone” was the most-watched original premiere for All Access, the company’s streaming service. Delivering programs directly to consumers via online platforms has been key to CBS’s growth strategy.
Streaming Growth
All Access and Showtime recently passed 8 million subscribers combined and are on track for 25 million by 2022. The company also announced plans to add kids programming to the All Access platform. CBS makes shows for its own streaming service and supplies shows to competitors.
“Content licensing also had a very strong quarter,” Ianniello said in a statement.
CBS said during its earnings conference call that it wouldn’t discuss any possible mergers. That left investors in wait-and-see mode. The shares were little changed after hours, trading at around $50.75.
CBS was up 16% to $50.82 this year through Thursday’s close, a gain that was just shy of the S&P 500 Index.
To contact the reporters on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net;Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
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