CBS results top Street, Viacom merger exploration at early stage
CBS Corp , owner of the most-watched U.S. television network, reported results that exceeded Wall Street expectations and said it was still in the early stages of exploring a merger with Viacom Inc , a deal favored by its controlling shareholders.
Media mogul Sumner Redstone, who controls both CBS and Viacom through his privately held National Amusements, in September proposed a merger of the two companies. Both have created special committees to explore a tie-up.
Shari Redstone, Sumner Redstone's daughter, has been in favor of merging CBS and Viacom under the leadership of CBS Chief Executive Leslie Moonves, sources have told Reuters.
On a call to discuss CBS earnings, Moonves told investors contemplation of a Viacom deal is still in the early stages, but added, "if it looks right and is structured properly, it could be an attractive opportunity."
Shares of CBS rose nearly 1 percent in post-close trading.
CBS, home to popular shows such as "Homeland" and "The Big Bang Theory" and the Showtime cable network, said revenue rose 4.3 percent to $3.396 billion in the third quarter.
Analysts had expected revenue of $3.34 billion, according to Thomson Reuters I/B/E/S.
Revenue from CBS's affiliate and subscription fees division rose 13.4 percent to $753 million in the quarter. Revenue from its content licensing and distribution business, one of its fastest growing, rose 6 percent to $1.11 billion.
The company said ad revenue, which accounts for more than 40 percent of total revenue, fell slightly to $1.47 billion.
CBS said net income from continuing operations rose to $514 million, or $1.15 per share, in the three months ended Sept. 30, from $426 million, or 88 cents per share.
Excluding items, CBS earned $1.05 per share, beating the average analyst estimate of 98 cents per share.
(Reporting by Rishika Sadam in Bengaluru and Jessica Toonkel in New York; Editing by Savio D'Souza and Bill Rigby)