CBS reported lower earnings as programming costs rose and ad revenues declined.
Second-quarter net earnings were down 24% to $332 million, or 67 cents a share, from $439 million, or 76 cents a share, a year ago.
Revenue rose 1% to $3.22 billion. Advertising revenues were down 3% to $1.6 billion.
“This quarter underscores the key steps we are taking to build out our long-term growth strategy,” said CEO Leslie Moonves in a statement. “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.”
Moonves said the company’s on target to surpass $2 billion in retrans and reverse comp revenue by 2020 and that the launch of streaming products for the CBS network and Showtime are producing revenue.
“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.
Operating income fell at CBS’s entertainment segment, which includes the CBS broadcast network, to $262 million from $341 million a year ago. Revenues were slightly lower. Costs were higher because of investments in programming and digital distribution initiatives, the company said.
At CBS’s cable segment, which includes Showtime, operating income rose to $220 million from $213 million. Revenues increased 19% to $615 million from $516 million.
Local broadcasting generated 8% lower operating income, or $198 million. Revenues dropped 2% to $654 million as advertising was down after last year’s election campaign spending. Affiliate fees were higher.