Tags: US | Earns | CBS

CBS Profit Falls Amid Mixed Advertising Picture

Friday, 19 Feb 2010 11:12 AM

Broadcasting company CBS Corp. said its net profit fell by more than half in the holiday quarter as an improvement in the advertising market was offset by a big drop in political spending.

Net income fell to $59 million, or 9 cents per share. That was down 57 percent from a year ago, when earnings were $136 million, or 20 cents per share.

Revenue fell 1 percent to $3.50 billion.

Political ad spending on the CBS network as well as its TV and radio stations was down in the final months of 2009 compared to a year earlier, when the U.S. presidential campaign was in full swing.

But a Supreme Court decision last month allowing American corporations to take out ads supporting candidates was expected to reverse that dip for the midterm congressional elections later this year.

Higher national ad sales and an improving market for local television ads in the fourth quarter were offset by declines in radio and outdoor advertising. CBS sold 10 radio stations last year, contributing to the sales decline.

The company said the current quarter was showing improvements in all areas — helped partly by record ratings for the Super Bowl and prime-time shows like "CSI: Miami," which are being helped by NBC's ratings troubles at 10 p.m.

"We are clearly a prime beneficiary of the recovering economy," Chief Executive Leslie Moonves said on a conference call.

Adjusted for one-time items, earnings in the three months to Dec. 31 were 25 cents per share. That met the expectation of analysts polled by Thomson Reuters. Revenue also beat estimates of $3.47 billion.

Laura Martin, an analyst with Needham & Co., said the pace of the advertising recovery was better than expected.

"Things are getting better faster than people think," she said.

The company, which is based in New York, did not provide guidance for 2010. Moonves said campaigning for midterm elections could boost revenue at TV and radio stations by $200 million, aided partly by the Supreme Court decision.

"There are a lot more races that we think are going to be rather hotly contested and that there is going to be a lot of money behind them," Moonves said.

Revenue for the year, however, won't benefit from the sale of some its shows to other networks. Last year, CBS sold five shows into syndication but doesn't expect any this year.

Last month, CBS' new film division debuted its first movie, "Extraordinary Measures," which cost about $30 million to make but made only about $12 million at the domestic box office. Moonves said the company was "disappointed" but did not say how much money the film would lose.

"Our first film did not perform nearly as well as we would have liked," he said.

For the full year, CBS reported a net profit of $227 million, or 33 cents per share, reversing a loss of $11.67 billion, or $17.43 per share, a year earlier, when the company booked a huge impairment charge on its assets. Revenue fell 7 percent to $13.01 billion.

CBS shares were flat in after-hours trading following the earnings report, after gaining 1.4 percent to close at $13.71 on Thursday.

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Broadcasting company CBS Corp. said its net profit fell by more than half in the holiday quarter as an improvement in the advertising market was offset by a big drop in political spending.Net income fell to $59 million, or 9 cents per share. That was down 57 percent from a...
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2010-12-19
Friday, 19 Feb 2010 11:12 AM
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