CBS.WD Cbs Corp.

By Joe Flint and Maria Armental 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 2, 2018).

CBS Corp. turned in a strong quarterly financial showing, powered by subscription and advertising growth at its main broadcast-TV unit, after months of corporate turmoil in the upper ranks of the company.

The media company on Thursday said subscriber revenue had hit a record at its direct-to-consumer streaming services including CBS All Access and Showtime OTT, which acting Chief Executive Joe Ianniello said CBS was significantly expanding.

Revenue from pay-TV distributors and its own affiliates also rose significantly and ad revenue increased by 14%.

Mr. Ianniello said he didn't anticipate any dramatic changes in strategy or approach to the media business.

"Our priorities are first and foremost to reinvest in our business and that's content creation, I don't see any change in our philosophy," Mr. Ianniello told Wall Street analysts.

The earnings call was the first for CBS since Mr. Ianniello was named acting chief executive in September after longtime Chairman and Chief Executive Les Moonves resigned in the wake of allegations of sexual harassment and assault. Mr. Moonves has denied the allegations.

CBS's net profit fell to $488 million, or $1.29 a share, from $592 million, or $1.46 a share, a year earlier. On an adjusted basis, profit rose to $1.24 a share from $1.11 a share a year earlier.

Revenue rose 2.9% to $3.26 billion, including a 14% increase from advertising and an 8% increase from content licensing and distribution.

Analysts surveyed by FactSet expected $1.22 a share in profit and $3.25 billion in revenue.

In August, when CBS released second-quarter results, company executives said subscriptions to CBS All Access and Showtime OTT were ahead of schedule and were expected to reach 16 million domestic subscribers by 2022.

CBS's board has been overhauled following the company's settlement of its legal battle with controlling shareholder National Amusements Inc. It currently has 10 members, down from 14 at the start of September. Only five of them were on the board when CBS reported second-quarter earnings. Interim Chairman Richard Parsons stepped down on Oct. 21, citing health reasons, and was succeeded by Strauss Zelnick.

A CBS veteran of more than two decades, Mr. Ianniello was most recently chief operating officer and is in the running to become permanent chief executive. The newly reconfigured CBS board of directors has retained Korn Ferry to lead a search for a permanent chief executive.

While Mr. Ianniello said he doesn't have a different philosophy than his predecessor, he has shaken up the executive ranks in the past few weeks. He tapped Showtime President David Nevins to be chief creative officer for all of CBS, giving him oversight of the entertainment operations of its broadcast network.

Two senior executives under Mr. Moonves, chief spokesman Gil Schwartz and human resources head Anthony Ambrosio have resigned from their positions.

Mr. Ianniello didn't address the Moonves situation or the ongoing investigation the CBS board is conducting into the culture at the company. The company hasn't said yet whether it would release the findings of the two law firms handling the investigation. In Mr. Moonves's exit agreement, CBS said it would "seek to preserve the confidentiality of all written and oral reports" from the investigation "to the maximum extent possible consistent with fiduciary duties of directors" and applicable laws.

CBS previously disclosed that it had been subpoenaed by the Manhattan District Attorney's Office and the New York Commission on Human Rights regarding the allegations against Mr. Moonves.

CBS shares closed 2% higher Thursday at $58.49. The stock is down 0.9% so far this year.

Write to Joe Flint at joe.flint@wsj.com and Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

November 02, 2018 02:47 ET (06:47 GMT)

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