CBS Network ad revenues up 1%

CBS reported a significant profit in the first quarter, driven by gains in retransmission and over-the-top revenue.

The company said it would not take questions about a potential combination with Viacom on its conference call with analysts.

Net income was $511 million, or 1.34 cents a share, compared to a loss of $252 million, or 61 cents a share, a year ago. Adjusted operating income was up 8% to $781 million.

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Revenues rose 13% to $3.76 billion.

Affiliate and subscription revenue was up 16% to $979 million, including a 25% increase in retransmission revenues. OTT revenue from direct-to-consumer products and streaming skinny bundles more than doubled.

CBS COO Joe Ianniello said that a third of the subscribers to CBS All Access have chosen the ad-free version of the service. He said CBS makes the same amount of revenue either way, but having more subscribers choosing the ad free options reduces the volatility of CBS's ad revenue.

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Content licensing and distribution revenue were up 18% to $995 billion. Advertising revenues were up 8% to $1.733 billion, including Network Ten in Australia, which was acquired at the end of 2017. CBS Network ad revenues were up 1%, despite competing with the Olympics.

“CBS' phenomenal first-quarter results once again affirm that we have the right strategy to successfully monetize our premium content now and in the future," said CEO Les Moonves.

"We achieved these record results thanks to the many ways we are delivering our must-have content, including our direct-to-consumer services -- CBS All Access and Showtime OTT -- which continue to grow rapidly and are now contributing meaningful dollars to our bottom line while attracting younger viewers. We are just beginning to reap the benefits from our position as an industry leader in delivering content over-the-top while others are just entering this business,” Moonves said. “With today's terrific results, we are even more confident in the very strong full-year growth outlook that we laid out three months ago."