CBS reported lower second quarter earnings as revenues declined.
The company also announced that it was increasing its quarterly dividend by 25% and increasing its share repurchase program to $6 billion.
Net earnings fell to $439 million, or 76 cents a share, from $472 million, or 76 cents a share a year ago.
Revenues slipped 5% to $3.19 billion from a year ago, when CBS aired the NCAA basketball tournament semifinal games. This year they were televised by Turner Broadcasting. Ad revenues fell 7% to $1.6 billion
“Our high-margin, fast-growing revenue streams continue to drive EPS, and they stand to become an even bigger factor in our growth going forward thanks to two recent major events,” CEO Leslie Moonves said in a statement. “First, we completed the separation of CBS Outdoor, which makes us less dependent on advertising and allows us to sharpen our focus on our core content business. Second, we received a landmark Supreme Court ruling that removed any distraction from our ability to achieve $2 billion in retransmission consent and station affiliate fees in 2020.“
Moonves added that “with so many ways to sell our content before us, we are constantly refilling the pipeline with new hits,” pointing to Thursday Night Football and original programming on Showtime. “The strong confidence we have in our business is why today we have announced we are significantly expanding the value we return to shareholders. We are reloading the amount authorized under our share buyback program to $6 billion and raising our quarterly dividend by 25%. These actions once again demonstrate our enduring strength as a content company and our continued commitment to our investors.”
At CBS’ Entertainment division, which includes the CBS Television Network, the TV studio, the distribution, films and interactive groups, operating income before depreciation and amortization fell 12% to $376 million. The decline was driven by lower revenue and increase investment in original television programming, the company said.
Entertainment revenues were down 7% to $1.84 billion, because of lower TV licensing revenues and lower ad revenues. CBS cited the shift of NCAA tournament games as well as a softness in the ad market during the quarter for the decline.
CBS’ cable networks registered a 6% increase in operating income to $207 million as affiliate revenues rose while programming costs went down. Revenues dropped slight to $516 million because of lower licensing revenue from international sales.
Operating income for CBS’ local broadcasting group decreased 7% to $238 million because of lower revenues, which were partly offset by lower programming costs. Revenues were off slightly because of softness in the ad marketplace that was mostly offset by an increase in affiliate and subscription fee revenues. Revenue at the CBS TV stations were down 6%. Radio revenues were down 3%.