CBS Corp (CBS) reported an 18% dip in earnings for the third quarter due to costs relating to corporate matters, and lower discontinued operations. However, the top and bottom lines exceeded analysts’ expectations.
Net income fell 18% to $488 million and earnings declined 12% to $1.29 per share. Adjusted EPS increased 12% to $1.24.
Revenue rose 3% to $3.26 billion. This was led by 79% growth from digital initiatives, including its owned streaming subscription services, and strong gains in retransmission revenues and fees from CBS Television Network-affiliated stations.
Looking ahead into the full year 2018, CBS remained on track to achieve its outlook, with revenue growth in the high-single digits and EPS growth in the high teens.
For the third quarter, advertising revenues grew 14%, including revenues of Network 10, which the company acquired in the fourth quarter of 2017, and higher political advertising sales. Content licensing and distribution revenues were up 8% for the quarter. This was partially offset by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, which took place in the third quarter of 2017.
Entertainment revenues increased 19% year-over-year helped by higher advertising revenue, higher station affiliation fees and revenues from digital initiatives, higher international licensing, as well as additional series produced for third-parties.
Higher print book sales and digital audio sales drove Publishing revenues higher by 5%. Local Media revenues increased 9% on growth in retransmission revenues and higher advertising revenues, reflecting increased political advertising sales associated with the U.S. midterm elections.
However, Cable Networks revenues dropped 32% as a result of Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017.
Shares of CBS ended Thursday’s regular session up 1.99% at $58.49 on the NYSE. The stock has fallen 0.86% in the year so far while it has risen over 4% in the past year.