CBS scores big win as merger with Viacom looms

CBS slam dunked its second-quarter earnings Thursday thanks in large part to an assist from "March Madness" and the NCAA Division I Men’s Basketball Tournament.

The annual hoops tourney helped boost advertising revenues by 7 percent and score records for revenue and earnings per share. CBS’ earnings per share of $1.16 beat Wall Street estimates by three cents and revenue of $3.81 billion bested analysts' calls by $100 million, all while media giant continued to hammer out details on its widely expected merger with Viacom Inc.

While the traditional broadcast network continues to be the star performer for CBS, it is the digital and streaming services that have the "Eye Network" riding high. In its earnings call Thursday, CBS announced it would start to roll out a children's programming block for CBS All Access later this year.

“Our direct-to-consumer services, CBS All Access and Showtime, continue to perform strongly, helping fuel a 13 percent increase in affiliate and subscription fee revenue for the quarter," acting CEO Joe Ianniello said in the CBS earnings release. "And we remain on track to reach our goal of 25 million subscribers combined by 2022.”

Ironically, it is the fate of Ianniello in the proposed merger with CBS that is, in part, holding up the deal according to FOX Business' Charlie Gasparino. Viacom CEO Bob Bakish is expected to take the helm of the combined companies if the deal goes through, but the boards want to keep Ianniello with the merged media giant beyond his contract which expires at year’s end.

Viacom announced its earnings hours before CBS and it too reported solid results. Earnings per share rose to $1.20, beating the analyst consensus of $1.07, while revenue increased to $3.36 billion beyond analysts’ expectations of $3.32 billion.