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CBS Reports Double-Digit Profit, Revenue Growth

Second consecutive solid quarter for Moonves, Redstone, Eye co.

CBS reported its second consecutive quarter of solid earnings on Tuesday, with revenue growth across all of the company’s businesses.

Revenues were $3.33 billion during the second quarter — up 11 percent over the same quarter last year and spurred on by double-digit gains at CBS’ local broadcasting networks (17 percent), cable networks (12 percent) and its entertainment segment (10 percent).

Overall, CBS’ advertising revenue grew nine percent, as advertisers returned to, well, buying ads.

The company reported adjusting operating income of $580.2 million — up 46 percent over its 2009 second quarter. CBS attributed the profit growth to the higher revenues, and said the results were partially offset by “increased investment in content” and higher costs related to carrying the NCAA Division I Men's Basketball Championship.

Net income was $150.1 million (or 22 cents a share) up nearly tenfold from the $15.4 million (2 cents a share) it reported in the second quarter a year ago.

The performance clearly tickled Sumner Redstone, who said he has “never been more confident in our company’s prospects.”

"For the second consecutive quarter, CBS delivered double-digit year-over-year revenue and profit growth, significant margin expansion and higher free cash flow," CBS president Les Moonves said in a statement attached to the earnings report. "With top-line gains in all of our businesses, and a continued vigilance on cost containment, revenues are translating more efficiently into profits.”

The increase in CBS' entertainment revenues was primarily due to higher international syndication sales for the "CSI:" franchise. Entertainment profits increased 7 percent (to $222.6 million) with the revenue growth partially offset by higher programming costs associated with broadcasting the NCAA Division I Men's Basketball Championship.

CBS’ cable network revenues increased 12 percent from rate increases and subscription growth at both Showtime and the CBS College Sports Network, as well as higher home entertainment revenues from sales Dexter and The Tudors DVDs.

CBS Television Stations revenues increased 31 percent (to $337.9 million), due to increased advertising revenues, including higher political ad sales.

"These results are due in part to the economy of course," Moonves (pictured) said during a conference call with investors. "But we are not just benefiting from a rising tide."

Looking ahead to the second half, “all signs point to ongoing growth and profitability,” Moonves added. “The very healthy ad sales pacing we're seeing today indicates that the recovery is continuing, and we expect a significant lift in political advertising around the November elections. Going forward, we see continued and sustainable benefits from growth in retransmission consent fees, expanded international distribution of our content and the vastly improved economics of our NCAA deal.”

He pointed to the 10-year pact with Comcast announced on Monday as a “huge opportunity for CBS."

Publishing revenues for CBS’ Simon & Schuster increased 5 percent (to $189.7 million) benefiting from digital sales and a couple of bestsellers, including Laura Bush’s "Spoken from the Heart."

Moonves also announced the company will roll out a new local website – CBSNewyork.com – that will lean on CBS’ local news and sports content.