CBS Profits Beat the Street, but Revenue Disappoints

Ad sales flat on tough year-to-year comps

CBS Corp.’s third-quarter profits beat Wall Street’s expectations, but the company’s net revenue fell shy of projections.

Earnings added up to $338 million, or 50 cents a share, about 4 cents more than analysts expected and up 7 percent from a year ago, when they were $317 million, or 46 cents a share.

CBS’ revenues were up 2 percent to $3.37 billion, thanks in large part to new digital licensing agreements as well as higher affiliate and subscription revenues. That figure did not match the consensus estimate of $3.43 billion.

Ad sales revenues were virtually flat at $1.99 billion, as the loss of political advertising offset gains in prime time.

CBS Corp. president and CEO Les Moonves reiterated that the company’s core business was in fine fettle, noting that the broadcast network “is significantly outpacing the field with more programs in the top 10 and top 20 in all key measures than all the other networks combined.”

CBS boasts the No. 1 new series of the 2011-12 TV season in the comedy 2 Broke Girls. Since premiering to a massive 19.4 million viewers and a 7.1 rating in the 18-49 demo, Girls is averaging 11.3 million viewers and a 4.4 in the demo.

Returning series Two and a Half Men and NCIS are also going strong. New dramas Person of Interest and Unforgettable have proven to be modest hits, and CBS rewarded both series with full-season commitments

There have been a few bumps in the road. The new Friday night drama A Gifted Man has faltered and is unlikely to survive the end of November sweeps. The Oct. 21 episode drew 8.67 million viewers and a 1.2 rating. And CBS canceled the new comedy How to Be a Gentleman after two episodes.

Through the first six weeks of the season, CBS is leading the pack in total deliveries, averaging 12.8 million viewers. The network trails Fox in the demo by two-tenths of a ratings point, averaging a 3.4 rating, up 1 percent versus the year-ago period.

Adjusted income for CBS’ entertainment division jumped 54 percent to $366 million, on revenues of $1.63 billion, up 1 percent.

The CBS cable networks, which include the premium service Showtime, boasted adjusted income of $197 million, up from $165 million a year ago. Cable revenues rose 14 percent to $420 million.