CBS reported fourth quarter and full-year earnings on Thursday afternoon, with Simon & Schuster registering strong sales of $235 million in the final quarter, up $26 million from a year ago (helped in part by the addition of Adams Media, acquired in November 2016). Operating income was $44 million, up from $36 million at the end of 2016.
For the full year, sales of $830 million were $63 million higher than a year ago, and operating income hit a new record of $132 million, up $13 million from a year ago. S&S had paid approximately $42 million to purchase Adams Media, and though the company does not break out how much Adams added to their sales, ceo Carolyn Reidy told us, “Our results would have been higher than the prior year” even without including Adams, which she said has proven to be “a very nice and healthy addition.”
“We had a great year,” Reidy said, noting “it was very satisfying.” In the final quarter the adult division gained almost 16 percent, with audio the other main growth segment in that period. “For the full year every single division was up,” Reidy said, with everything but the children’s division “up significantly.”
She noted that in the fourth quarter and throughout the year “we saw a great balance between frontlist, with both selling strongly.” As Bookscan statistics bear out writ large, Reidy said they “saw a kind of shift in the business,” as “backlist was even stronger than it has been in the past.” Reidy suspects that “the word of mouth on backlist in trade paperback is so much stronger now that books, once they take hold,” continue to sell strongly.
Digital products comprised 22.4 percent of sales for the year (or $186 million), down from 23.4 percent a year ago (or $179.5 million) — so actual digital sales in dollars rose 3.6 percent, given the company’s higher total sales for the year. All of the gains and then some came from digital audio, as ebooks continued to decline. Reidy expects digital audio sales to continue growing this year, particularly as they add “original and new and different kinds of content.” On ebook sales, she says, “I keep expecting them to stabilize. In 2017 we were surprised to see a decline in ebook sales.”
Reidy acknowledged that, as with other major publishers, some of their important continuing authors have been experiencing sales declines, though “we see exceptions that make us happy.” She said “we’re putting a lot of attention and experimentation to try to stop that decline or reverse it.” While “it’s natural for some authors over time to reach a peak and start to decline; we’re talking about these real powerhouses that have fueled the industry for a lot of years” and “we do see it as a pattern” across the industry. “It’s still a challenge to help an established, bestselling author maintain and grow his or her audience–that’s a big challenge in today’s world.”
At the same time, Reidy was encouraged to see that their strong titles from the fourth quarter “have maintained their sales and are continuing to sell, well into the new year.” Separately, the process for replacing Judith Curr “is an extremely active search” and they expect “to identify the right person…before too long.” Asked about the new effort to evaluate putting CBS and Viacom back into a single company again, Reidy said they are not commenting — like their parent company — but noted, “We’re busy publishing. The one thing we do know is that CBS greatly values us.”
