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CBS Posts Rare Drop in Ad Sales, Shares Hit 13-Month Low

CBS' 'Star Trek: Discovery'

CBS Corp. (CBS) has erased all gains that its shares made over the past 13 months.

After years of saying CBS was unlike any other media company, the owner of the most-watch television network appears to be getting hit by the same over-arching trends that have slowed or even reversed revenue gains at nearly all entertainment conglomerates.

Shares in the broadcast giant were falling in after-market trading on Thursday, Nov. 2, after CBS reported a rare quarter in which revenue trailed analyst forecasts. Sales of $3.17 billion for the third quarter amounted to a 2.8% increase from a year ago despite missing a $3.26 billion analyst estimate. Third quarter adjusted profit fell to $1.03 per share, a 1% decline from a year ago even as it surpassed analyst expectations of $1.02 per share.

CBS's stock, though, has lost 14.4% this year through Thursday's close at $54.46. Shares were down 2% after hours to $53.40. Digging into the top-line number, advertising sales for the third quarter declined 5% compared with the same period a year ago, driven largely -- thought not exclusively -- by lower political spending.

CEO Leslie Moonves was quick to underscore that advertising in the third quarter of 2016 also included one additional Thursday Night Football game in addition to the benefits of the presidential campaign. Moonves said that CBS is poised to finish 2017 with roughly the same amount of network advertising it has generated for the past five years, roughly $4 billion, excluding proceeds from Super Bowls.

CBS is now trading at a level last touched in late September 2016, before Donald Trump was elected president but one month into a dark and foreboding trend: declining audiences for National Football League games. Some argue that he NFL has diluted the product by hosting games on Thursday and Sunday evenings. Ratings for CBS's Thursday night games are indeed in free fall, down 15% for the first five games of the current season compared to last year.

CBS's broadcast on Oct. 26 of the Baltimore Ravens trouncing the hapless Miami Dolphins by a score of 40 to zero registered a mere 2.2 Nielsen ratings score. Nonetheless, CEO Leslie Moonves said the network remained bullish about the NFL even as the league and its TV partners have been unable to staunch a ratings decline that began in earnest at the start of the 2016 season.