CBS Profit Beats Estimates on Strong Publishing, Ads
CBS reported stronger-than-expected quarterly earnings Thursday, as strength in its publishing and outdoor advertising businesses overcame depressed results from its radio division.
CBS, which runs the most-watched U.S. television network, reported third-quarter net earnings of $343.3 million, or 48 cents per share, compared with $316.9 million, or 41 cents per share, a year earlier.
Following the release of the earnings report, CBS shares gained 15 cents, or less than 1 percent, at $28.41 in after-hours trade. During regular market hours, the media company's shares closed down 44 cents, or 1.53 percent, at $28.26 on the New York Stock Exchange.
CBS revenue fell about 3 percent to $3.28 billion, due to lower television license fees as well as the impact of radio and television station divestitures.
Analysts had expected the company to post earnings of 44 cents per share on revenue of $3.36 billion, according to Reuters Estimates.
CBS, which has been raising its dividend while buying back shares, has been selling some assets, including radio stations and TV stations, as it tries to shed lower margin properties.
It cited the assets disposals in saying it expected revenue to be down 2 percent to 3 percent for the year. It said operating income in 2007 will be comparable to 2006 and left unchanged its long-term low single-digit growth in revenues, mid single-digit growth in operating income and high single-digit growth in earnings per share.
In the third quarter, CBS' radio division, which recently restructured senior management and has been experimenting with different formats in some markets, suffered from a weak advertising market in the quarter. Revenue from the unit fell 12 percent.
At CBS television, known for its stable prime-time lineup, one that has drawn the largest TV audience for five straight years, but has struggled to find a new break-out hit so far this season, revenue fell 3 percent.
But TV operating income before depreciation and amortization, a key measure of media industry profitability, rose 4 percent to $476.1 million.
Outdoor advertising revenue, which includes outlets such as billboards, rose 8 percent.
Publishing at its Simon & Schuster unit was also strong, with revenue up by 5 percent.