The owner of television's top-rated network has been reducing its reliance on the volatile advertising market by seeking higher fees from cable, satellite and Internet video providers. They want the right to show popular series such as "The Big Bang Theory," ''The Good Wife" and "Dexter."
CBS Corp. evidently isn't making the transition quickly enough to satisfy investors. The company's stock dipped $1.51, or 2.6 percent, to $56.50 in extended trading after the first-quarter numbers came out.
The New York company blamed a 12 percent decline in its advertising sales on the rotating rights to the Super Bowl, which has become television's marquee marketing program. After appearing on CBS last year, the Super Bowl shifted over to Fox this year.
The absence of the Super Bowl accounted for virtually all of the ad decrease during the first three months of this year, according to CBS. The network also broadcast two fewer games during the NCAA men's basketball tournament than it did last year.
Meanwhile, revenue from CBS' cable networks rose 12 percent from last year. The company credited higher licensing fees from Internet video services such as Netflix Inc. for the rights to Showtime series such as "Dexter," as well as higher retransmission frees paid by cable and satellite distributors.
CBS has set a goal of $2 billion in annual fees for retransmitting its content by 2020.
Hitting that target will be more difficult if TV broadcasters lose a legal challenge against Aereo Inc., a service that grab signals off the airwaves so they can be transmitted to its own subscribers over high-speed Internet signals. The U.S. Supreme Court last month heard arguments over whether Aereo is infringing on TV broadcasters' copyrights. A decision is expected by the end of June.
"We have confidence that the court will find Aereo to be illegal," CBS CEO Leslie Moonves reassured analysts during a Thursday conference call. "Regardless of the outcome, though, our growth outlook will be unaffected."
CBS earned $468 million, or 78 cents per share, during the first three months of the year. That compares with $443 million, or 69 cents per share, last year.
Revenue fell 5 percent from last year to $3.86 billion.
Analysts, on average, had projected earnings of 75 cents per share on revenue of $3.92 billion.