CBS rode the advertising rebound to blow past Wall Street expectations and post a dramatic increase in earnings.
Shares are trading higher after hours after news that earnings per share (excluding items) came in at 46 cents, up from just 25 cents a year ago, on 11 percent higher revenue of $3.9 billion.
Advertising drove the rebound—up 12 percent for the quarter, on growth in both national and advertising and political ad revenues.
CEO Les Moonves said in the earnings call that the scatter market —when marketers buy ads at the last minute—was "extremely hot in the fourth quarter and continues to be up even hotter," now up 40 percent over the upfront ad period.
This bodes quite well for May's Upfront ad sales period. Moonves says demand for local ads is so strong that even if they hadn't had political ads, they could have easily sold out ad time to the surge of local marketers.
But Moonves stressed the fact that CBS is diversifying away from advertising, growing other robust revenue models. Content licensing and distribution revenues were up 21 percent in the quarter, with a boost from the syndication sale of "CSI: Crime Scene Investigation."
Moonves said that the rapid growth of retransmission fees—payments from cable and satellite companies to broadcast the CBS network—is helping "diversify the revenue base," adding that the company is "working on new retransmission deals all the time.
And of course no media giant can ignore the growing importance of digital revenue. Moonves says the company will continue to do non-exclusive digital deals that will provide recurring revenue. The basic online ad picture is strong: display ad revenues grew 18 percent year-over-year.
The digital story at publisher Simon & Schuster is impressive: sales of digital content grew 117 percent over a year, now a significant part of the business. And CBS continues to push into the mobile space. It produces more than 40 apps and has doubled the page views across mobile sites in the past year.
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