CBS Profit Down in Q4, But Moonves Upbeat on Revenue

Company reports 57 percent net earnings slide, claims advertising is coming back

Last Updated: February 19, 2010 @ 9:25 AM

CBS said on Thursday that its fourth quarter profits plummeted 57 percent on lower ad revenue for its radio and outdoor businesses.

But the company’s earnings per share were in line with analysts’ expectations, and executives said the trends — particularly in advertising — are improving.

The company took a $178 million hit for license fees owed the Federal Communications Commission in the wake of an audit.

As as result, the company’s profits fell to 58.8 million, compared to $136.1 million a year ago.

Though CBS remained profitable for the quarter, its trend line didn’t compare favorably to those of other media giants like News Corp., which reported a 44 percent increase in profit during the last three months of 2009.

Nonetheless, CBS’ top brass tried to put a positive spin on the results.

“As we promised, each quarter in 2009 improved on the one before – culminating in our best performance of the year in the fourth quarter,” said president and chief executive Les Moonves. “The good news is, the rising revenue trends are continuing into 2010.”

“Throughout the past year, Leslie and his team did all the right things to position CBS for a vibrant future, and the results we’re reporting today speak to our momentum,” said chairman Sumner Redstone said in a statement. “We’ve managed through the year with financial prudence, while at the same time continuing to invest in our top-quality content businesses and maintain our industry-leading position. I’m very excited about all that we can achieve going forward.”

Moonves noted that national and local advertising are “improving substantially” so far in the first quarter – with “dramatic gains in scatter and sales pacing for the network and our TV stations.” Nonpolitical advertising at its local TV stations was up 11 percent during the quarter.

Despite the profit slide, Wall Street had expected this. CBS’ quarterly profit 9 cents per share – or 25 cents per share after write-downs — were more or less in line with what analysts had forecasted.

For the full year, CBS’ revenues — $13.01 billion — fell 7 percent, due to lost political advertising it benefited from during the 2008 election campaigns.

The company’s entertainment revenues increased 4 percent during the fourth quarter, driven by 8 percent growth in ad sales at CBS Television.