BENGALURU: CBS Corporation reported a one per cent growth in revenue to $3219 million in the quarter ended 30 June, 2015 (Q2-2015) as compared to the $3188 million in the corresponding year ago quarter.
The company’s slight revenue growth was propped by a 19.2 per cent growth by its Cable Network segment, which is one of the four that contribute to the company’s numbers. Cable Networks segment reported revenue of $615 million in the current quarter as compared to the $516 million in the corresponding year ago quarter.
The other three segments-Entertainment, Publishing and Local Broadcasting reported decline in revenue in Q2-2015 by 2.7 per cent, 5.7 per cent and 1.7 per cent respectively as compared to Q2-2014.
Adjusted operating income was $641 million for the second quarter of 2015 compared with operating income of $730 million for the same prior-year period, reflecting higher investment in programming and digital distribution initiatives says CBS. Adjusted net earnings from continuing operations were $365 million for the second quarter of 2015 compared with net earnings from continuing operations of $418 million for the same prior-year period, as a result of the lower adjusted operating income.
Company speak
“CBS is at the center of the action during an extremely exciting time in media. We continue to succeed as a result of our world-class content, and Les and his team are positioning the Company to prosper in the quarters and years ahead,” said CBS executive chairman Sumner Redstone.
“This quarter underscores the key steps we are taking to build out our long-term growth strategy. Central to that strategy is the progress we’re seeing with our fast-growing, non-advertising revenue sources, and there’s so much more to come as our investment in global content and new distribution pathways pays off. We are now on target to surpass our goal of $2 billion in retransmission consent and reverse compensation revenue by 2020 – thanks to a series of recent deals that reset the value of our content in the marketplace. Additionally, the launch of Showtime’s streaming service and the rapid expansion of CBS All Access are generating incremental revenue streams that will continue to grow in the years ahead,” added CBS president and CEO Leslie Moonves.
“Of course, our premium content remains the cornerstone of our success, and I am confident this fall’s new primetime lineup will lead us to another victory next season. In fact, our schedule is so strong that we achieved solid pricing increases and the highest rates overall in the advertising upfront, and we also expect healthy increases in the scatter market throughout the year. As we lay the groundwork for a lucrative 2016 and beyond, we are also holding the line on costs, and we remain as focused as ever on investing in the best content, enhancing our strong financial position, and returning value to shareholders,” Moonves said.
Overall numbers
Revenues for Q2- 2015 increased, driven by affiliate and subscription fees that grew 28.3 per cent to $752 million as compared to the $586 million, driven by Showtime’s distribution of the highest-grossing pay-per-view boxing event of all time, as well as 40 per cent growth in retransmission revenues and fees from CBS Television Network-affiliated television stations. Advertising revenues decreased 2.6 per cent to $1594 million as compared to $1636 million in the corresponding quarter of last year. Content licensing and distribution revenues were down 9.7 per cent to $815 million in the current quarter from $903 million in Q2-2014, primarily reflecting lower domestic television licensing revenues, which were partially offset by higher international television licensing revenues.
Segment numbers
Entertainment
CBS Entertainment segment comprises CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive, and CBS Films.
Entertainment revenues were $1785 million for Q2- 2015 compared with $1835 million for the same prior-year period, primarily reflecting the timing of television licensing revenues. Advertising revenues were down two per cent because of a sale of an Internet business in China during Q1-2015 and the timing of certain sporting events on the CBS Television Network. Affiliate and subscription fees were up 50 per cent, driven by growth in rates.
Entertainment operating income for Q2- 2015 was $262 million compared with $341 million for Q2-2014, reflecting lower revenues and higher investment in programming and digital distribution initiatives.
Cable Networks
Details of Cable Networks revenue comprising Showtime Networks, CBS Sports Network, and Smithsonian Networks have been mentioned above.
Cable Networks operating income for the second quarter of 2015 of $220 million increased from $213 million for the same prior-year period, as the revenue growth was partially offset by higher programming costs for the pay-per-view boxing event.
Publishing (Simon & Schuster)
Publishing revenues for Q2- 2015 were $199 million compared with $211 million for the same prior year period. Digital revenues represented 24 per cent of Publishing’s total revenues for Q2-2015. Bestselling titles in the second quarter of 2015 included The Wright Brothers by David McCullough and Finders Keepers by Stephen King, as well as the continued success of the Pulitzer Prize-winning 2014 release, All the Light We Cannot See by Anthony Doerr.
Publishing operating income of $25 million for the second quarter of 2015 increased nine per cent from $23 million in Q2- 2014, as the revenue decline was more than offset by lower production and distribution costs.
Local Broadcasting
Local Broadcasting comprises CBS Television Stations and CBS Radio.
Local Broadcasting revenues of $654 million for Q2-2015 decreased two per cent from $665 million in the same prior-year period. The decline was the result of lower advertising revenues, including political spending from last year’s midterm elections. Growth in affiliate and subscription fees partially offset the decline. CBS Television Stations revenues were up one per cent, and CBS Radio revenues decreased five per cent.
Local Broadcasting operating income for the second quarter of 2015 was down eight per cent to $198 million from $215 million for the same prior-year period, primarily reflecting the revenue decline.
