CBS to report earnings as CEO faces sexual-misconduct probe

August 02, 2018 - 6:50 am

NEW YORK (AP) — CBS will report second-quarter earnings on Thursday as turmoil swirls around the media company as the important fall TV season approaches.

CEO Les Moonves is facing a board investigation after the New Yorker published a story on Friday with six women accusing him of sexual misconduct spanning three decades. The allegations against Moonves include complaints of forced kissing, unwanted sexual advances and career retaliation against women who rebuffed him. The board will keep Moonves in his job while it hires an outside firm to investigate. Moonves is expected to face questions from analysts during an earning conference call Thursday.

CBS will report results from the April-to-June quarter after the market closes. Analysts expect CBS to report higher revenue from a year ago, on stronger ad sales from its CBS network and more subscribers to its streaming services — CBS All Access, which expanded to Canada in April, and a standalone version of Showtime.

As its leadership's future comes into question, CBS is also locked in a court battle with its parent company, National Amusements, which also owns Viacom. CBS fears that the head of National Amusements, Shari Redstone, will try to combine CBS and Viacom. CBS has sought to implement a special dividend to reduce National Amusements' control of the company. Redstone is challenging that in a Delaware court.

CBS is facing an industry roiled by consolidation. Media companies are combining to better compete against fast-growing internet companies like Netflix and Amazon. AT&T bought Time Warner for $85 billion in June and Disney is in the process of buying Fox's entertainment businesses for $71 billion.

As more people skip traditional cable subscriptions to watch TV online, CBS has pushed into streaming more aggressively than other networks. CBS launched its own service rather than providing shows to outside streaming services such as Netflix or Hulu. It has some shows that are exclusive to the $6-a-month CBS All Access, including "Big Brother: Over the Top"; "The Good Fight," a spinoff of its hit law procedural "The Good Wife"; and "Star Trek: Discovery."

Last quarter, CBS said CBS All Access and Showtime streaming services combined had 5.3 million subscriptions, on track to exceed CBS' goal of 8 million U.S. subscriptions by 2020. The services continue to "gain momentum," Bernstein analyst Todd Juenger said in a note to clients.

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