CBS Corporation CBS continued with its positive earnings surprise streak for the sixth straight quarter, as it reported second-quarter 2016 results. The company’s earnings of 93 cents a share beat the Zacks Consensus Estimate of 86 cents and jumped 26% from 74 cents reported in the year-ago quarter.
Moreover, total revenue of this diversified media conglomerate rose 2% to $3,287 million and also came in ahead of the Zacks Consensus Estimate of $3,222 million, thus marking the third successive quarter of revenue beat. The top line benefited from a 16% jump in content licensing and distribution revenues due to the licensing of five Star Trek series in the international marketplace. A 44% increase in retransmission revenues and fees from CBS Television Network affiliated stations and revenues from new digital distribution platforms also aided revenue growth.
Adjusted operating income surged 14% to $733 million, whereas adjusted operating margin came in at 22.3% in comparison to 19.9% in the prior-year quarter.
CBS Corporation (CBS) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Segment wise, Entertainment revenue increased 9% to $1,947 million. Content licensing and distributions revenues surged 19%, reflecting increased international television licensing revenues, primarily from sales of Star Trek library programming. Affiliate and subscription fees soared 59% backed by a rise in station affiliation fees, retransmission revenues, and subscription growth for CBS All Access. Advertising revenues fell 3% on account of the absence of the broadcast of the NCAA Tournament finals on CBS and due to the sale of internet businesses in China last year.
The segment’s operating income soared 34% to $351 million, primarily driven by growth in revenues.
Cable Networks’ revenue declined 13% to $536 million, as the prior-year quarter benefited from the Floyd Mayweather/Manny Pacquiao boxing event. However, the company registered increased revenues from domestic and international licensing of the Showtime original series and a 5% jump in affiliate and subscription fees.
The segment’s operating income climbed 3% to $227 million mainly due to a jump in higher-margin revenues, partly offset by higher investment in original series.
Publishing revenue came in at $187 million, down 6% year over year. Digital revenue now accounts for 23% of Publishing's total revenue. Operating income grew 4% to $26 million on account of a fall in production, selling, and inventory costs.
Local Broadcasting revenue edged down 1% to $647 million in the quarter owing to the absence of CBS's broadcast of the NCAA Tournament finals and a fall in local radio advertising sales. These were partly offset by growth in retransmission revenues. Revenues for both CBS Television Stations and CBS Radio dropped 1%. The segment’s operating income rose 7% to $212 million. The company is in the process of separating its radio business.