Driven higher by retransmission fees and digital revenue, CBS beat earnings expectations with an upbeat outlook for 2013. But revenue came in lighter-than expected, dragged down by CBS Radio's advertising declines, as well as foreign exchange rates, and the impact of the Republican and Democratic conventions pre-empting six nights of programming. But CEO Les Moonves' projections for the fourth quarter were rosy, saying the company will benefit from higher retransmission compensation, plus more digital revenue, as well as the surge of political advertising, which shifted into the fourth quarter this campaign season.
Revenues inched up 2 percent to $3.42 billion—the strongest growth from a 12 percent increase in affiliate and subscription fee revenues. Excluding one –time items earnings came in at 65 cents per shares, four pennies more than anticipated, and up from 50 cents a year ago.
Moonves boasted that CBS , which was once almost entirely reliant on advertising, is now diversifying: This past quarter, a record 44 percent of its revenue came from non-ad sources, namely compensation for its broadcast and cable networks. Moonves says that the company has recently closed retransmission deals for over 40 percent of its distribution, and says "they were signed on terms significantly better than anything we've done before." With more deals due up for renewal in the next year, he says the company will beat its goal of reaching $1 billion in retrains and affiliate revenue by 2017