• by Wayne Friedman , May 4, 2018

On positive earning news, CBS stock rose steadily on Friday. A day after releasing its financial results, CBS stock was up 5% to $51.23.

In its first quarter, CBS’ retrans and affiliate fees continued to show steep gains, while domestic advertising revenues only witnessed a slight rise.
CBS TV Network ad revenue was up 1%.  

CBS’ U.S. network ad business is also improving.

“Advertising accelerated from the fourth quarter and the demand for broadcast network advertising continues to be strong as we head into the upfront,” said Joseph Ianniello, COO for CBS, during a earnings phone call on Thursday.

Going forward, CBS predicts a strong upfront. Les Moonves, chairman/CEO of CBS Corp., says: “Scatter [market] is as strong as it is right now with pricing up well more than 20%.”

Scatter market advertising deals are near-term/month-to-month or quarterly ad agreements.

Barton Crockett, senior media analyst at B. Riley FBR, estimates that CBS stations had double-digit percentages declines in advertising revenue. Overall, total advertising was up 11%, due to the acquisition of Australia’s Network TEN, to $1.7 billion.

CBS' TV stations revenue rose 1% to $415 million -- mostly due to a 25% hike in retransmission revenues. There was 16% growth in total affiliate and subscription fees to $979 million, which represents 26% of total CBS revenues.

“Our non-advertising revenue grew 17% during the quarter and now makes up about 54% of our total revenue,” says Ianniello. Advertising is now estimated to be 46.1% of all CBS revenue -- with content licensing and distribution at 26.5%; and affiliate and subscription fee revenues at 26%.

CBS now has over 5.3 million combined subscribers to CBS All Access and Showtime OTT. Per analysts, it is targeted to hit its 8 million U.S. domestic subscribers by 2020.

Content licensing and distribution revenues increased 16% to $995 million, with total entertainment revenues up 16% to $2.7 billion. Cable networks revenues were 12% higher to $609 million, while publishing slipped 1% to $160 million.

Overall CBS revenue increased 13% to $3.76 billion; net income was $511 million versus a net loss of $252 million in the first quarter a year ago.

On Wednesday -- when CBS posted its earnings -- executives wouldn’t comment about any potential merger with Viacom.