CBS Up 5%, Moonves Predicts Strong Upfront
CBS grabbed a healthy 5% gain in advertising revenues in the first quarter for all its media businesses -- and expects somewhat stronger ad gains for the upcoming TV upfront advertising market.
Now at $2.4 billion, CBS said there was growth in network prime time and sports advertising, which includes the semifinals of the NCAA men's basketball championship that aired during the first quarter of 2012 versus the second quarter of 2011.
CBS also gained 7% in affiliate and subscription fee revenues, rising to $455 million -- for its cable networks and from higher retrans revenues for its TV stations. Domestic and international program sales were up 39% to $1.02 billion.
The non-advertising revenue group now represents 37% of its overall revenue take. Analysts have noted in the past that CBS -- more than any other big media company -- is subject to the up-and-down vagaries of the advertising economy.
Concerning the TV upfront ad market, Les Moonves, president and CEO of CBS Corp., said in prepared remarks: “We guarantee we will lead the market again this year in volume and CPMs.”
Moonves had previously touted the CBS network is looking at double-digit CPM gains for the upcoming upfront selling period. “If we don’t get our right pricing, we are not going to sell,” he said during the analyst call for the first quarter of 2012. He said it is CBS' intent to sell around 80% of its advertising inventory.
Fourth-quarter 2011 advertising was somewhat weak for CBS, according to one analyst. But CBS says the scatter marketplace is now stronger. “Scatter is still at double digits [percent increases],” says Moonves. “We are still in a terrific position. Advertisers have come back.” He added that the stability of CBS' prime-time schedule helps marketers better structure their media plans.
First-quarter company-wide revenues were up 12% to $3.9 billion, with operating income 47% higher at $642 million. Net earnings during the period were 80% higher to $363 million. This included an after-tax gain of $16 million and early extinguishment of debt.
Entertainment revenues grew 16% to $2.32 billion from licensing of television programming for digital streaming and syndication, higher advertising revenues and increases in retrans revenues. CBS says half of its TV advertising revenue gain during the period came from the semifinals of the NCAA Tournament.
Local broadcasting revenues were flat at $622 million. The network says there was increased spending by automotive manufacturers and retailers, as well as higher retrans revenues -- offset by lower advertising from utilities and service businesses. Breaking this down further, CBS Television Stations revenues gained 2% in the period, while CBS Radio revenues declined 2%.
CBS expects low single-digit revenue gains for local broadcasting in the second quarter.
Cable network revenues added 15% to $452 million. Publishing revenues gained 14% to $176 million from strong sales in what the company says is its more profitable digital content, as well as higher print book sales. Outdoor revenues slightly increased 1% to $416 million.