Highfields Capital Management and CBS Corporation
Jonathon Jacobson’s Highfields Capital Management’s top new purchases are Air Products & Chemicals, Inc. (APD), Broadcom Corporation (BRCM), Applied Materials, Inc. (AMAT), Royal Dutch Shell (RDS.A), and JPMorgan Chase (JPM). Highfields sold out positions in CBS Corporation (CBS) and Hess (HES).
Highfields liquidated a 1.13% position in CBS Corporation (CBS). CBS is a is a mass media company that creates and distributes industry-leading content across a variety of platforms to audiences around the world.
CBS posted its fourth-quarter earnings and revenue growth that beat Wall Street expectations. Revenue grew across all segments except Local Broadcasting. Advertising revenues remained flat, as a 4% increase at the CBS Television Network was offset by lower political advertising revenues at Local Broadcasting. In the third quarter as well, broadcasting revenue decreased 3% to $641 million as a result of lower political advertising revenues compared with 2012, which benefited from the U.S. presidential election. At that time, the company denied that the results were impacted by a dispute with Time Warner Cable, which resulted in a programming blackout for millions in August last year.
Adjusted net earnings from continuing operations were $477 million for the fourth quarter of 2013, or $.78 per diluted share, up from $414 million, or $.64 per diluted share. Revenues of $3.91 billion for the fourth quarter of 2013 grew 6% from $3.70 billion in the same prior-year period. This growth was led by a 28% increase in content licensing and distribution revenues, which was driven by higher domestic and international licensing of television programming.
CBS said it plans to finish the spinoff of its Outdoor Americas billboard business by the end of March. CBS has also submitted a private-letter ruling request with the IRS to gain REIT status and is among the companies awaiting a response from the agency. Outdoor Americas revenues for the fourth quarter of 2013 grew 2% to $347 million from $340 million for the same prior-year period. In constant dollars, revenues rose 3%, led by 5% growth in the U.S. CEO Leslie Moonves added that the “IPO will unlock its value and significantly enhance our ability to return capital to shareholders. In fact, that’s why today we’re announcing an accelerated share repurchase of $1.5 billion in addition to stepping up the pace of our open market share repurchases during the first quarter.”