• by Wayne Friedman , November 12, 2019

A rise in programming spending as well as costs from direct-to-consumer streaming services slowed down CBS’s third-quarter operating income.

The company’s adjusted operating income dropped 21% to $581 million from $736 million. Income was also affected by its pending merger with Viacom.

Operating cash flow also sank to $27 million, compared with $137 million for the third quarter of 2018.

On Tuesday morning, CBS' stock price was down 3% to $38.00. Revenue results were below analysts' projections.

At the same time, overall company revenues inched up only 1% to $3.3 billion -- with much of the gain coming from affiliate and subscription fees, rising 12% to $1.1 billion.

Advertising revenue went in the other direction -- off 7% to $1.2 billion. The decline was largely due to high political advertising spending from the midterm elections in the third quarter a year ago.

Revenue from content programming sales remained virtually even at $939 million, from $933 million in the period before.

Entertainment revenues -- the CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network and CBS Films -- were up 4% to $2.2 billion. There was a big 22% hike in affiliate/subscription revenues from its TV station deals with virtual pay TV providers and higher subscriber growth from its digital platform CBS All Access.

Cable networks -- Showtime Networks, Pop and Smithsonian Network -- saw revenues rise 6% higher to $563 million, as a result of the Showtime digital streaming subscription business. Cable networks' financial results now include ad-supported network Pop.

For local media -- its TV stations and local digital media operations -- revenues slipped 6% to $406 million, mostly due to lower political advertising.

Publishing revenues were $217 million versus $240 million in the year-ago period.