Amid major public turmoil surrounding the alleged misconduct by CEO Les Moonves, CBS Corp. reported modest second-quarter revenue gains, with strong upfront advertising business for next TV season.
Quarterly revenue grew 6% to $3.5 billion. Advertising revenues for all its businesses were 2% higher to $1.33 billion, from $1.30 billion. Looking just at CBS Network, its advertising revenues inched up 1% during the period.
During the earnings call with analysts, Moonves said CBS saw high single-digit percentage to low double-digit percentage price increases, with healthy overall volume for its upfront advertising activity for the upcoming TV season,
At the top of the call, a CBS investor relations executive said the company declined to speak about the sexual misconduct allegations around Moonves. Earlier in the day, the CBS board of directors said it hired two law firms to investigated the allegations.
CBS says that TV advertising grew despite the absence of semifinals and national championship games of the NCAA Men’s Basketball Tournament, which aired on Turner networks. CBS and Turner share the national TV rights of the month-long event.
Moonves says CBS' exposure to advertising is now at a low level -- representing 38% of all CBS revenue. He also added that current, near-term scatter market advertising sales are seeing 20% pricing increases.
In the quarter, entertainment revenue was 8% higher to $2.4 billion, while cable networks were 4% higher to $591 million and local TV stations' revenue was up 2% to $420 million; with publishing virtually flat at $207 million.
Digital advertising volume at CBS grew 40%. Content licensing and distribution revenues were 4% higher to $1.1 billion. CBS’s affiliate fees and subscriber revenue added 17% to $989 million.
CBS says it is accelerating subscriber efforts for its digital OTT services. Combined CBS All Access and Showtime OTT platforms -- on track to hit 8 million in 2019 -- are now estimated to hit 16 million by 2022, earlier than projected.
Net earnings from continuing operations for the second quarter of 2018 inched up 1% to $400 million. After market trading, CBS stock was down 1.3% to $52.05.