CBS Sees Results Improving In 2nd Half Of 2009

Les Moonves, chief executive of CBS Corp. (CBS), joined the chorus of media executives sounding a note of optimism about signs of improvement in advertising markets, which have been decimated by the recession.

Despite recording a first-quarter loss that disappointed investors, Moonves on Thursday said on a conference call with analysts following the release that the company's performance is poised to improve in the second half of 2009.

"Indications are we've seen the bottom of this downturn," said Moonves. "It's still premature to call it a full recovery, but the trends are encouraging, particularly in for the back-half of the year. We believe the balance of 2009 will be better than these results."

Specifically, Moonves said the volume of deals in the so-called scatter market for advertising has increased "dramatically" in recent weeks and prices are higher as well. The scatter market refers to ads sold during the television season as opposed to before it.

As for ad cancellations for the third quarter, Moonves said it's too early to tell what will happen.

CBS Chief Financial Officer Fred Reynolds said spending from automotive advertisers is higher now than it was last year at this time.

Similar comments were made over the past week by top executives at other major media conglomerates such as News Corp. (NWSA), Walt Disney Co. (DIS) and Viacom Inc. (VIA). But Moonves noted that CBS is backing up its optimism with a full-year earnings guidance that, if achieved, would mark a dramatic improvement in the company's performance. The company forecast operating income before depreciations and amortization in a range from $1.725 billion to $1.925 billion for the year.

Moonves said he was confident in the forecast due in part to easier comparisons in the second half of the year as well as cost cuts the company has made that will begin to help its financial performance, particularly in the fourth quarter.

CBS Chairman and controlling shareholder Sumner Redstone also said he sees "clear signs" that the economic situation is starting to improve and he has full confidence that a recovery will begin.

"Network television is still the best game in town, particularly for big brands coming out of a down cycle," said Moonves.

-By Nat Worden, Dow Jones Newswires; 201-938-5216; [e-mail]