(Reuters) - CBS Corp (CBS.N), which is in tough merger talks with Viacom Inc (VIAB.O), topped revenue and profit estimates on Thursday, helped by healthy ad sales and higher revenue from affiliate and subscription fees.
The New York-based company, whose shows include “Big Bang Theory” and “NCIS” reported strong results as it and Viacom, which are both controlled by Sumner Redstone and his daughter Shari, have begun tough negotiations over price and management of a combined company.
Shares of the company were slightly higher in after-hours trading.
CBS executives declined to comment on merger talks with Viacom on the analyst call Thursday, and Chief Executive Leslie Moonves was upbeat about the company’s ability to continue to grow based on its current strategy of increasing revenue outside of advertising.
“The strategy that we have laid out for you is clearly working and the good news is that there is much more to come,” Moonves said on the call.
The owner of the most-watched U.S. television network said affiliate and subscription fees revenue – which includes revenue from cable and satellite TV operators and from online streaming providers, including its own All Access offering – rose 16.3 percent in the first quarter.
More than two-thirds of subscribers to CBS’ online streaming offerings are electing to pay more for the services to watch them without ads, said CBS Chief Operating Officer Joseph Ianniello, on the call.
“This number should only increase,” he said, which should help reduce dependence on advertising for revenue.
Advertising revenue rose 8.1 percent to $1.73 billion and CBS executives said they expected continue growth in advertising beyond 2018.
CBS reported net income from continuing operations of $511 million, or $1.32 per share, in the first quarter ended March 31, up from $454 million, or $1.09 per share, a year earlier.
Excluding one-time items, CBS reported a profit of $1.34 per share, beating analysts’ average estimate of $1.19, according to Thomson Reuters I/B/E/S.
CBS said revenue rose 12.5 percent to $3.76 billion. Analysts on average had expected revenue of $3.64 billion.
Reporting by Munsif Vengattil in Bengaluru and Jessica Toonkel in New York; Editing by Bernard Orr and Lisa Shumaker