CBS Beats Wall St Estimate, Moonves Silent on Allegations


CBS Corp’s quarterly revenue topped Wall Street expectations and CEO Les Moonves delivered an upbeat message to investors about the media company’s future on Thursday, without addressing allegations of sexual misconduct against him reported last Friday.

At the start of an analysts conference call on CBS earnings that was also broadcast on business television CNBC, the company said it would not take questions about Moonves’ reported behavior or its legal battle with majority shareholder Shari Redstone over control of the U.S. media group.

Shares of CBS were little changed after the close of regular trading on the New York Stock Exchange. Moonves said the company’s digital business, which includes Showtime and CBS All Access streaming services, is forecast to grow to 16 million domestic subscribers by 2022, up from a prior forecast for 8 million subscribers by 2020.

Moonves remains CEO of CBS as two law firms conduct an investigation into allegations of sexual misconduct made against him by several women, reported by the New Yorker magazine.

The CBS board approved the hiring of the law firms on Wednesday and also set up a special board committee to help the probe. Moonves will have no role in the investigation, CBS said.

The investigation, which will also look at broader cultural issues at CBS, follows an article in the New Yorker magazine last Friday detailing claims by six women who said Moonves sexually harassed them in incidents between 1985 and 2006.

Moonves was quoted in the New Yorker as saying that he “may have made some women uncomfortable by making advances”, which he called mistakes that he regretted immensely, but that he understood “‘no’ means ‘no'” and had never used his position to harm anyone’s career.

CBS stock is down more than 9.0 percent since publication of the New Yorker article on July 27.

Moonves is the latest executive to come under scrutiny by the #MeToo social media movement, which has demanded accountability from business leaders, politicians and entertainers accused of sexual misconduct and has led to resignations in major corporations, Hollywood and among lawmakers in the past year.

The claims about Moonves come as he is locked in a battle over control of CBS with the company’s largest shareholder, National Amusements Inc, which is owned by Shari Redstone and her father Sumner Redstone.

Moonves has opposed efforts by Shari Redstone for CBS to merge with media company Viacom Inc, also owned by National Amusements.

Moonves, who has served as CEO of the media company since it was split from Viacom Inc in 2006, has resisted a deal to reunite the companies because he believes CBS’s prospects are brighter without taking on Viacom’s turnaround challenges.

CBS, whose shows include hit sitcom “The Big Bang Theory,” said advertising revenue during the second quarter rose slightly to $1.32 billion.

Overall revenue increased to $3.47 billion, up from $3.26 billion a year earlier, beating analysts’ average estimate of $3.46 billion, according to Thomson Reuters I/B/E/S.

CBS said affiliate and subscription fees revenue, which includes revenue from cable, satellite and streaming TV providers, rose to $989 million from $848 million a year before.

Net income from continuing operations was $400 million, or $1.05 per share in the second quarter ended June 30, up from $397 million, or 97 cents per share, a year earlier.

Adjusting for restructuring and other charges, CBS said it earned $1.12 a share.

(Reporting by Sheila Dang; additional reporting by Munsif Vengattil in Bangalore and Carl O’Donnell in New York; Editing by Bill Rigby)

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