CBS (NYSE:CBS), owner of the most-watched U.S. TV network for more than six years, reported first-quarter earnings and sales that surpassed Wall Street expectations as revenue from affiliates and subscription fees rose.
The New York-based company reported $394 million in net income in the January-to-March quarter, down from $468 million a year ago. Earnings per share rose to $0.78 from $0.77 as the weighted average number of common shares outstanding fell. Analysts on average expected earnings of $0.75 per share.
Revenue of $3.50 billion beat the average analyst forecast of $3.44 billion, according to Capital IQ.
CBS has been focusing more on non-advertising revenue, such as subscription and retransmission fees, to help offset fluctuations in advertising revenue, which can vary from quarter to quarter depending on events.
Advertising revenue represented 51 percent of total revenue in the quarter. The contribution of non-advertising income to CBS's total revenue rose from 43 percent in 2009 to just under 50 percent in 2014, Reuters reported, citing research firm Trefis.
"CBS turned in another quarter of record EPS, and our investment in world-class content will lay the foundation to drive future profits," chief executive officer Leslie Moonves said in the statement.
Shares slid 0.7 percent to $60.76 at 1:56 p.m. in New York. The stock is up 9.7 percent this year.
Entertainment sales, the company's largest segment declined to $2.26 billion in the quarter. Ad sales fell to $1.78 billion from $1.87 billion in the year-earlier period.
Publishing revenue from its Simon & Schuster division fell 5 percent to $145 million as it registered lower book sales.
The local broadcasting stations that CBS owns generated $596 million in revenue, down 5 percent as advertising sales dipped.
The cable networks unit, which operates Showtime, CBS Sports Network and Smithsonian Networks, reported a slight decline in revenue — $539 million vs. $537 million a year ago.
"Looking ahead, we will continue to build upon our position of great strength with a new prime-time lineup that we will announce next week, and we expect to be No. 1 in the upfront marketplace," he stated.