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MUMBAI:
US media conglomerate CBS has posted net earnings of $427
million for the second quarter ended 30 June 2012, up eight
per cent.
Operating
Income was $769 million, an increase of five per cent.
CBS
executive chairman Sumner Redstone said, "CBS’s
content continues to fuel the success of this great company.
In a world where greatprogramming commands premium pricing,
we continue to hit on allcylinders. I am extremely pleased
with our terrific second-quarter results, and I am confident
that Leslie and his management team willbuild on our momentum
in the quarters and years to come."
CBS
expects to show stronger performance in the second half of
the year due to the US presidential elections and the Olympics.
The prospects for 2013 also look good as the network has Super
Bowl.
CBS
president, CEO Leslie Moonves said, “For all of these
reasons, we’re confident 2012 will be a record year,
and we will produce exceptional results in 2013 and
beyond as well.”
Two
factors in the second quarter of 2011 – the Company’s
initial multiyear digital streaming agreement (under which
dozens of the Company’s library titles were first made
available for streaming) and the semifinals of the NCAA Division
I Men’s Basketball Championship (which aired during the
first quarter in 2012) – had an impact on the revenue
comparison.
Second
quarter 2012 revenues came in at $3.48 billion compared with
$3.59 billion for the same quarter a year ago. Some of the
impact was offset by growth in high-margin affiliate and subscription
fee revenues, while underlying advertising revenues for the
second quarter of 2012 reflected a steady marketplace. In
addition, the OIBDA margin improved two percentage points,
to a record 26 per cent and the operating income margin expanded
two percentage points, to 22 per cent, in the second quarter
of 2012.
Those
increases, as well as the company’s record performance
in the
three key metrics mentioned above, reflect a higher profit
margin on
2012 television licensing revenues as well as the growth in
high-margin affiliate and subscription fees.
Free
cash flow was $558 million for the second quarter of 2012,
compared with $646 million for the second quarter a year ago.
For the first half of 2012, free cash flow was $1.17 billion
compared with $1.50 billion for the first half of 2011, reflecting
higher investment in content (primarily television programming)
and higher income tax payments. The company generated cash
flow from operating activities of $1.26 billion for the six
months ended June 30, 2012, versus $1.59 billion for the comparable
prior-year period.
Entertainment
Entertainment
(CBS Television Network, CBS Television Studios, CBS Studios
International, CBS Television Distribution, CBS Films, and
CBS Interactive) revenues of $1.71 billion for the second
quarter of 2012 decreased 7 per cent from $1.84 billion in
the same prior-year period. Last year’s second quarter
benefited from the initial licensing of the company’s
programming for digital streaming, the third-cycle domestic
syndication sale of Frasier, and the semifinals of the NCAA
Division I Men’s Basketball Championship, which aired
during the first quarter of 2012 versus the second quarter
of 2011. Some of the impact was offset by growth in high-margin
retransmission revenues and higher international syndication
revenues in the second quarter of 2012.
Cable
Networks
Cable
Networks (Showtime Networks, CBS Sports Network, and Smithsonian
Networks) revenues for the second quarter of 2012 increased
by eight per cent to $446 million from $413 million for the
same prior-year period. The results were driven by higher
affiliate revenues, which reflect increases in rates and subscriptions
at Showtime Networks (which includes Showtime, The Movie Channel,
and Flix), CBS Sports Network, and Smithsonian Networks, as
well as higher licensing revenues from the digital streaming
of Showtime original series.
Outdoor
Outdoor
revenues for the second quarter of 2012 decreased by two per
cent to $481 million from $490 million for the same prior-year
period, driven by the unfavorable impact of foreign exchange
rate changes. In constant dollars, revenues increased 1 per
cent from the second quarter of 2011.
Revenues
for the Americas (which includes North America and South America)
increased by two per cent in constant dollars for the second
quarter of 2012, principally driven by growth in the US billboards
and displays businesses, partially offset by the impact from
the nonrenewal of the Toronto transit contract.
Revenues
for Europe increased by one per cent in constant dollars,
primarily reflecting higher advertising sales associated with
the 2012 Summer Olympics in London. Some of this increase
was offset by weakness in the European economy and the nonrenewal
of certain contracts.
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