Riding Ad Rebound, CBS Beats Expectations, Doubles Dividend

CBS blew past expectations, with net income growing more than five fold, on double digit increases in advertising, its NCAA March Madness deal, and stronger results from the company's non-advertising businesses.


The company's revenue was pretty much flat, despite tough comparisons to last year, when CBS broadcast the Super Bowl. CEO Les Moonves says thanks to improved visibility, the company is doubling its quarterly dividend and continuing its share buyback, sending the stock higher after hours and increasing its

Moonves says he's "very encouraged by strength in advertising" not just for this year, but looking to 2012 as well. Moonves stressed that CBS is moving beyond reliance on advertising — growing retransmission fees and payments from affiliates. He pointed to CBS deal with Netflix, saying it'll generate incremental revenue starting in the second quarter, without cannibalizing any other revenue stream. This is a strategy CBS wants to continue to pursue — he says they'll be looking for other ways to monetize the network's library. And Showtime, which has no advertising continues to grow, on more subscribers — now more than 20 million — and higher rates.

But CBS' bread and butter is its advertising, and the outlook for the upcoming 'Upfront' ad sales period was particularly robust. Moonves says he expects double digit increases in upfront sales, noting that the primetime scatter market has been up over 40 percent higher than last year's Upfront prices. Moonves addressed the media frenzy over Charlie Sheen's departure from "Two and a Half Men" obliquely. He stressed that CBS is "by far the most stable network in the business," and "only has a few spots to fill" when it launches its new pilots.

The media company reported 29 cents in earnings per share, compared to expectations of 19 cents per share, and far more than the year-ago number of five cents per share. And revenue came in at $3.51 billion, more than expected, and just one percent less than last year due to CBS broadcasting the Super Bowl in 2010.

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