MUMBAI: US media conglomerate CBS Corporation has reported results for the third quarter ended 30 September, 2006.
CBS’ operating income rose by four per cent to $646 million led by television and outdoor. Net earnings from continuing operations went up by 26 per cent to $324 million.
Revenues of $3.4 billion for the third quarter of 2006 were up slightly from the same quarter last year, as growth at outdoor and publishing was offset by a decline at radio, the shutdown of broadcaster and lower home entertainment revenues due to the switch from self-distribution in 2005 to third party distribution in 2006.
For the nine months ended 30 September 30, 2006, revenues were $10.4 billion which marked an increase of one per cent from the same prior-year period, as growth at outdoor, television and publishing was partially offset by a decline at Radio. Results for the first nine months of 2006 reflected $24.0 million of expenses related to the UPN shutdown as well as the impact of stock-based compensation expense of $51.7 million versus $13.1 million for the nine months ended 30 September, 2005.
For the quarter, television revenues of $2.2 billion decreased slightly from the prior year as growth in television license fee revenues and affiliate fees was more than offset by lower advertising and home entertainment revenues.
Television license fees increased by seven per cent principally due to the domestic syndication sale of CSI: Miami and higher foreign syndication revenues. Affiliate fees increased six per cent due to rate increases and subscriber growth at Showtime and the inclusion of CSTV Networks since its acquisition in January 2006. Ad revenues decreased by three per cent primarily due to the shutdown of UPN in September of 2006 and the absence of the Primetime Emmy telecast in 2006, partially offset by strong political advertising sales at the television stations.
Home entertainment revenues decreased by 35 per cent principally due to the switch from self-distribution in 2005 to third party distribution in 2006. The CW, a 50/50 per cent joint venture broadcast network with Warner Brothers Entertainment, was launched in September 2006 and has been accounted for as an equity investment in the third quarter of 2006.
CBS executive chairman Sumner Redstone says, “CBS Corporation is right on track. “We remain committed to escalating shareholder value as we continue to drive our businesses forward. I am encouraged by the strategic vision Leslie and his team have put forth to capitalize upon the tremendous opportunities unfolding in the digital age.”
CBS president, CEO Leslie Moonves says, “This was another strong quarter, posting solid profit increases in Television and Outdoor, generating significant free cash flow, and delivering the third of three dividend increases since the start of the year. In Radio, our plan to strategically reduce the number of markets in which we operate is well underway. We have signed agreements to sell 29 stations for a terrific value. We also believe that the growth we’re seeing in key formats such as Jack, Spanish and Talk bodes well for improved performance at Radio in 2007.
” Through innovative partnerships with YouTube, Yahoo, and many other key new media concerns, we’re aggressively pursuing opportunities that help us extend our world-class mass-appeal content to new digital platforms and channels and get paid for it. As a premier content company, we continue to be pleased with new technological developments that allow consumers to more easily enjoy our content, and extend our reach into the digital space.”
The company expects to deliver low single-digit growth in revenues, mid single-digit growth in operating income and high single-digit growth in earnings per share.
