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  • CBS Q2 revenue up 8% to $3.6 bn

    Submitted by ITV Production on Aug 06
    indiantelevision.com Team

    MUMBAI: US media conglomerate CBS has reported an eight per cent jump in revenue to $3.6 billion for the fiscal second-quarter ended June.

    The revenue increase was driven by 21 per cent growth in content licensing and distribution revenues, which benefited from a new licensing agreement for the digital streaming of select library titles.

    Revenues were also boosted by 12 per cent growth in affiliate and subscription fee revenues, reflecting rate increases and subscription growth as well as higher retransmission revenues.

    Ad revenues increased by three per cent despite a difficult comparison to last year‘s second quarter, which posted higher political advertising and higher revenue for the NCAA Division I Men‘s Basketball Championship ("NCAA Tournament"). CBS‘s new programming agreement for the NCAA Tournament results in lower revenues, but higher profits.

    Operating income before depreciation and amortization ("OIBDA") of $873 million for the second quarter of 2011 increased by 51 per cent from $579 million for the same prior-year period, driven by strong growth and margin expansion in every segment.

    The OIBDA margin increased seven percentage points to 24 per cent compared to last year‘s second quarter. The Company‘s strong growth and margin expansion was driven by higher margin revenue streams, as well as lower sports programming costs resulting from the new programming agreement for the NCAA Tournament.

    Operating income for the second quarter of 2011 increased 69 per cent to $734 million from $435 million for the same quarter last year. Net earnings were $395 million for the second quarter of 2011, up from net earnings of $150 million and adjusted net earnings of $176 million,, for the same quarter last year due to the aforementioned OIBDA growth and a decrease to interest expense of $24 million, driven by the company‘s 2010 debt reduction activities.

    Free cash flow for the second quarter of 2011 increased by 32 per cent to $646 million from $491 million for the second quarter of 2010 and for the first half of 2011 increased 30 per cent to 1.50 billion from $1.15 billion for the first half of 2010, principally driven by the OIBDA increase.

    Entertainment (CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Films and CBS Interactive) revenues for the second quarter of 2011 increased by 10 per cent to $1.84 billion from $1.67 billion for the same prior-year period, driven by the new licensing agreement for the digital streaming of select library titles, the third-cycle domestic syndication sale of Frasier, higher retransmission revenues and growth in Network primetime advertising.
     
    These increases were partially offset by the impact of the new programming agreement for the NCAA Tournament, which resulted in lower revenues but higher profits. Entertainment OIBDA for the second quarter of 2011 increased 97 per cent to $440 million from $223 million for the same prior-year period with an 11 percentage point improvement in the margin to 24 per cent.

    The strong margin growth reflects increases in higher margin revenues as well as lower sports programming costs resulting from the new programming agreement for the NCAA Tournament.

    Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks) revenues for the second quarter of 2011 increased by 12 per cent to $413 million from $369 million for the same prior-year period driven by rate increases and growth in subscriptions at both Showtime Networks and CBS Sports Network, as well as higher international syndication and home entertainment revenues for Showtime original series.

    Showtime Networks (which includes Showtime, The Movie Channel and Flix) subscriptions totaled 70 million as of June 30, 2011, up by 6 million from the same time last year, due to higher cable, direct broadcast satellite and telco subscriptions.

    CBS Sports Network subscriptions of 44 million were up by eight million compared to the prior year, resulting from increased cable subscriptions, driven by the company‘s ten year carriage agreement with Comcast entered into in 2010, and higher direct broadcast satellite subscriptions. Smithsonian Networks subscriptions of eight million as of 30 June, 2011 were up by three million from the same time last year.

    Cable Networks OIBDA for the second quarter of 2011 increased by 36 per cent to $176 million from $129 million for the same prior-year period, reflecting revenue growth as well as lower theatrical programming costs, partially offset by higher programming costs for original series.

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