CBS' First Quarter Gets Hit With Red Ink

Feeling the full brunt of a slowing advertising market, CBS took a net loss of $55.3 million in the first quarter of 2009 versus profitability of $244.3 million in the same quarter in 2008.

Company-wide revenues also shrank, $3.16 billion compared to $3.65 billion for the same quarter last year, due to lower advertising revenues.

No business segment was spared -- except for CBS Interactive, which more than doubled revenue during the period, rising to $133.6 million from $52.9 million the year before. Much of this was due to the CNET acquisition in this first-quarter period.

Television revenues dropped 12% lower to $2.2 billion versus $2.5 billion in the period before; Outdoor slipped 24% to $379.9 million from $496.9 million; radio declined 29% to $259.7 million from $363.6 million; and publishing fell 20% to $161.7 million.

From an operations standpoint, only television and radio posted operating income, with $184.7 million and $43.7 million, respectively. All other units were at an operating loss: outdoor at $38.2 million; interactive at $11.6 million; publishing at $2.1 million; and corporate at 33.0 million.



Looking to future business, Les Moonves, president/CEO of CBS Corp., said in a release: "We are confident that the second half of the year will bring improved results due to a strong slate of syndication releases, the effect of cost reductions that were made last year and early signs of an improving local advertising marketplace."

Among its biggest divisions, television advertising sales decreased 15% from a soft advertising marketplace, to $1.3 billion. Television license fees decreased 24% in the absence of the big international fees that occurred in the first quarter of 2008 from "CSI". Inside the TV group, only home entertainment revenues grew to $62.7 million from $37.0 million a year ago.

Second-quarter scatter advertising activity has improved. "We have seen the volume of scatter increase dramatically," says Moonves. "Rates are up slightly over the upfront. The scatter market is returning."

In regard to third-quarter TV options, Moonves says it's too early to tell what TV marketers will do. TV marketers typically can cancel up to 50% of their network upfront deals during the period.

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