CBS Corporation Reports First Quarter 2019 Results

NEW YORK, May 2, 2019

"CBS has once again grown across all of our key financial metrics, while continuing to invest in our future as a global multiplatform premium content company," said Joe Ianniello, President and Acting Chief Executive Officer, CBS Corporation. "We delivered higher profits and achieved double-digit revenue growth, helped in part by Super Bowl LIII and strong increases in affiliate and subscription fee revenues. At a time when others are losing subscribers, our total number of subs across traditional MVPDs, virtual MVPDs and our direct-to-consumer services once again grew strongly during the quarter. In fact, our direct-to-consumer subs grew 71% from last year, and we are seeing strong growth here in the second quarter thanks to premium original series such as The Twilight Zone on CBS All Access and Billions on Showtime. At the same time, we also continue to produce more and more content for a variety of buyers, including Amazon, Apple and Netflix, which will debut the critically acclaimed Dead to Me from CBS Television Studios tomorrow. Plus, in two weeks we'll be unveiling a whole new lineup of hit shows on the #1 broadcast network -- and most-powerful platform in the business -- the CBS Television Network. Given our Company's strong programming pipeline and our early-mover advantage in direct-to-consumer, we feel very confident about CBS' leadership position in a media landscape that values must-have content above all else."

First Quarter 2019 Results

Revenues for the first quarter of 2019 increased 11% to $4.17 billion from $3.76 billion for the same prior-year period. Advertising revenues grew 18%, driven by the broadcast of Super Bowl LIII on the CBS Television Network. Affiliate and subscription fee revenues rose 13%, led by growth in the Company's direct-to-consumer streaming services, fees from CBS Television Network affiliated stations and retransmission revenues, including from virtual MVPDs. Content licensing and distribution revenues decreased 3% as a result of the benefit to 2018 from the renewal of a domestic licensing sale of Dexter.

Operating income for the first quarter of 2019 increased to $1.23 billion from $772 million for the same prior-year period. The comparison was affected by discrete items in the first quarter of 2019, including a gain of $549 million on the sale of CBS Television City and charges relating to a restructuring plan initiated during the quarter. Adjusted operating income increased 2% to $793 million from $781 million for the same prior-year period. The increase was primarily driven by the revenue growth, which was offset by a higher investment in premium content, including an increase in the number of owned series, and higher costs associated with the growth and expansion of the Company's direct-to-consumer streaming services.

Net earnings for the first quarter of 2019 were $1.58 billion compared with $511 million for the first quarter of 2018. Comparability was affected by a discrete tax benefit of $768 million, or $2.04 per diluted share, resulting from a reorganization of the Company's international operations. Adjusted net earnings decreased 1% to $515 million from $518 million for the first quarter of 2018.