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CBS misses revenue estimates as AT&T dispute hurts ad sales

Published 11/12/2019, 11:01 AM
© Reuters. The CBS Television Center is seen in Los Angeles

(Reuters) - CBS Corp (N:CBS) fell short of Wall Street estimates for third-quarter revenue on Tuesday, as a 19-day carriage dispute with AT&T Inc (N:T) pressured advertising sales during the period.

Shares of CBS and sister company Viacom Inc (O:VIAB) were down more than 3% in morning trading.

CBS stations went dark for more than 6.5 million DirecTV, DirecTV Now and AT&T U-verse customers in at least 14 U.S. cities, including New York, Los Angeles and Chicago, before CBS and AT&T signed a new content carriage agreement on Aug. 8.

Sales from advertising, which was also hurt by the timing of the broadcast of certain sporting events, fell 6.8% to $1.18 billion in the quarter from a year earlier. The year-ago period was boosted by the 2018 U.S. midterm elections related ads.

The distributor of renowned shows such as "The Twilight Zone" and "NCIS" reported an 11.5% increase in its affiliate revenue, or the fees collected from cable, satellite and online distributors, to $1.12 billion.

CBS is in the process of re-uniting with Viacom to create a larger multi-platform content company and re-make media mogul Sumner Redstone's U.S. entertainment empire at a time of intensifying streaming wars. The merger would bring in an expansive slate of over 3,600 movies and 140,000 television episodes for ViacomCBS Inc.

Net earnings fell to $319 million, or 85 cents per share, in the third quarter ended Sept. 30, from $488 million, or $1.29 per share, a year earlier.

Adjusted earnings came in at 95 cents per share, beating analysts' average estimate of 92 cents, according to IBES data from Refinitiv.

© Reuters. The CBS Television Center is seen in Los Angeles

CBS posted a 1% rise in revenue to $3.30 billion, but missed analysts' average estimate of $3.36 billion.

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