In the company’s third quarter financials, CBS (NYSE: CBS.A and CBS.B) reports revenue of $3.17 billion, a 3 percent increase over $3.08 billion for the same period last year. Affiliate and subscription fee revenues were up 52 percent, and included revenue from the Mayweather-McGregor pay-per-view boxing match and streaming subscription services like CBS All Access and its exclusive, new program Star Trek: Discovery which premiered on September 25.

Net earnings for the quarter were $592 million, compared to $478 million for the same period last year. Diluted earnings per share were $1.46, compared to $1.07 per diluted share for the same period last year. CBS Corporation Chairman and CEO Leslie Moonves commented on the third quarter results in a press release:

‘Our solid third-quarter results demonstrate the way we are shifting our business to capitalize on changing viewing habits,’ said Moonves. ‘To that point, during the quarter, we saw dramatic growth in our affiliate and subscription fees, including revenue from traditional and skinny bundles as well as over-the-top viewing. Today we have more subscribers at CBS and at Showtime than we did a year ago, and best of all, newer digital platforms are resulting in more revenue per subscriber than traditional ones. So not only are we growing our subs, but we are growing our rates as well.’

‘Our over-the-top services had a particularly strong third quarter, thanks to the exciting launch of Star Trek: Discovery on CBS All Access and the Floyd Mayweather/Conor McGregor pay-per-view event on Showtime. Of course, premium content is also driving our success at the CBS Television Network, where we are once again #1 this season, with two of the top three new shows, including Young Sheldon, which premiered as the #1 show on television overall,’ Moonves added.

Other highlights for the quarter include:

• Content licensing and distribution revenue was down 22 percent.
• Advertising revenue was down 5 percent, due to lower political advertising. The third quarter of 2016 benefited from political advertising and from broadcasting of one less Thursday Night Football game.
• Operating income was down 2 percent to $707 million.
• Net earnings for the third quarter were $592 million, up from $478 million for the same period last year. This included a noncash gain of $100 million.
• Diluted earnings per share were $1.46 compared to $1.07 for the same period last year.

CBS Corp. revenue for the third quarter is broken down as follows:

Other highlights include:

• CBS All Access’s premiere of Star Trek: Discovery brought the most single-day sign-ups in the service’s history.
• On August 7, CBS and AT&T announced a partnership to bring CBS, Showtime, The CW, Pop and CBS Sports Network to DIRECTV NOW.
• On October 4, CBS All Access announced that its first, original comedy series No Activity would premier on November 12, the same night as the conclusion of Star Trek: Discovery.

On November 1, 2017, the day before Q3 financials were released, CBS stock was valued at $56.19 per share. On November 2, the stock value dropped to $54.46 per share, but it has since rebounded, and was $56.74 per share as of 5:36 PM Eastern on November 10.

Insider Take:

CBS not only posted record numbers and earnings, but it is seeing significant increases in its subscription revenue. Its streaming subscription product, CBS All Access, has set a high bar for similar services. It also made a wise move by developing Star Trek: Discovery, exclusively for CBS All Access. The Star Trek franchise has been popular for decades, so building on that success and tying it to a subscription product will reap benefits for CBS for many seasons to come.