CBS Corp.might be a titan of old media but its first-quarter earnings were boosted by gains in new media: the digital distribution of its television programming and the sale of e-books.
The New York-based broadcasting company beat analyst estimates with 80% higher net earnings for the quarter ended March 31. The company earned $363 million, or 54 cents per diluted share, up from $202 million, or 29 cents per diluted share, compared with the year-earlier period. The substantially higher margin came from growth in operating income as well as lower weighted average shares as a result of the company's stock repurchase program.
CBS generated revenue of $3.92 billion, an increase of 12% from the first quarter of 2011.
"The growth in digital is a positive development for us," CBS Chief Executive Leslie Moonves told Wall Street analysts in a conference call Tuesday to discuss earnings. "We are extremely pleased with our first quarter. We broke records in five key financial metrics for the quarter, and I'm confident we will break records for the year as well."
CBS attributed the increase to content licensing, particularly its online distribution deals with Netflix andAmazon.com, and higher fees paid by cable and satellite TV operators for the retransmission of CBS' broadcast signal. Content licensing and distribution revenue soared 39%.
"There are a lot of players out there circling the building," Moonves said. "They need our content. It's an exciting period of time."
Companywide advertising revenue was up 5%. At the flagship CBS broadcast network, ad sales were up 8%. Moonves said the network is expected to end the TV broadcast season in first place in key advertising demographic groups: total viewers, viewers aged 18 to 49 and viewers aged 25 to 54.
CBS boasts the most stable schedule in network television.
"With 18 shows already renewed, the competition to get onto our schedule is extremely strong, meaning that we will be much more selective than our competitors will have to be," Moonves said.
As the company heads into the upfront advertising sales season, he said, "we feel very good about our future, both creatively and financially."
Investors have been expecting CBS to post a strong year, lifted by hundreds of millions of dollars in political spending expected to flood the company's TV and radio stations.
CBS shares closed Tuesday at $33.42, up 4 cents. The shares are trading 33% higher than last year at this time.
In addition to the CBS television network, which broadcasts such popular shows as "NCIS," "Survivor," "Hawaii Five-0" and "Two and a Half Men," CBS owns TV and radio stations, a billboard unit, premium cable channel Showtime and the Simon & Schuster publishing house.
The company said it spent $269 million to buy back about 9 million of its shares in the first quarter, and also sold a radio station group in the mid-size market of West Palm Beach, Fla., as part of its strategy to concentrate on stations in the nation's largest markets.