CBS 2Q Profit Slumps 96% On Ad Woes, Debt Buyback

   DOW JONES NEWSWIRES 
 

CBS Corp.'s (CBS) second-quarter profit sank 96% on lower ad sales and one-time gain, but the media giant cited early signs of a recovery.

Shares rose 1.3% to $8.65 in after-hours trading as earnings excluding the items edged expectations. The stock has almost tripled from its all-time low in March but is still down more than half from last August.

"As we anticipated, early signs of a recovery took hold in the second quarter," with results better than the first quarter, said Chief Executive Les Moonves.

He added CBS expects the second half of the year to be "considerably stronger" than the first. Moonves noted CBS was the only network to add viewers this summer and that "we also have a strong slate of syndication titles in the pipeline for release between now and year-end."

CBS has suffered from a steep downturn in ad revenue and is losing viewers to the Internet. The company slashed its dividend, and Standard & Poor's Ratings Services in June lowered its debt rating to one notch above junk, even after the company bought back debt with near-term maturities and issued longer-dated bonds.

For the latest quarter, CBS reported a profit of $15.4 million, or 2 cents a share, down from $408.4 million, or 61 cents a share, a year earlier. Excluding items such as a debt-extinguishment loss in the latest quarter and divestitures a year earlier, earnings fell to 8 cents a share from 49 cents.

Revenue dropped 11% to $3.01 billion on lower ad sales.

Analysts' estimates were for per-share earnings of 7 cents on revenue of $3.03 billion, according to a poll by Thomson Reuters.

Revenue fell in in the interactive business, where it tripled amid acquisition. Profits also fell in every division which had earnings while the billboard segment swung to a loss and interactive's loss narrowed.

Revenue at CBS's TV business - its largest division - fell 9.9%, with earnings down 44%, on lower ad sales, home entertainment revenues and television license fees.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]