CBS beat expectations thanks to better than expected performance from its TV and Outdoor divisions, while its overhead came in lower than expected. The company reported earnings from continuing operations of 54 cents per share, a penny above Wall Street's consensus estimate.
CBS faced the impact of the writers' strike this quarter, and there were a lot of concerns about the company because it's more exposed to the TV industry than any of the other media giants. But CEO Les Moonves said the company wasn't financially hurt by the strike and doesn't see any signs of recession. The company's TV revenue came out ahead of expectations. While advertising revenue fell 7 percent in the quarter, CBS had higher affiliate and syndication revenue.
In the company's post-earnings conference call, CEO Les Moonves said that the writers' strike is giving the network a chance to revamp its development process. He said "pilots are vastly overrated," saying that "you don't have to spend $5 million" on a pilot to know if the show will work.
Moonves, along with NBC Universal's Jeff Zucker, are looking for ways to make TV development less expensive, to streamline the hit-finding process. He says the network will be more efficient moving forward. The company is still holding its annual 'Upfront' presentation for advertisers this May. I'm curious to see how it's different.
CBS Outdoor advertising division was a source of real strength, earnings up 19 percent on a seven percent gain in revenues. Gains came from Europe and Asia, the weak U.S. dollar contributing here. CBS also owns Simon & Schuster, which faced some tough comparisons to the year-ago period when it published Stephen King's "Lisey's Story." That division's earnings were down a whopping 24 percent.
Moving forward I'll be watching to see whether CBS still remains immune to signs of an economic slowdown. And also, to see just how different its TV production system becomes.
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