CBS Profit Falls 52% on TV Advertising, Charge

Feb 18, 2009  •  Post A Comment

CBS Corp.’s profit fell 52 percent in the fourth quarter as business deteriorated at its television operations. The company cut its quarterly dividend to 5 cents a share, down from 27 cents in an effort to maintain financial flexibility in the recession.
Fourth quarter net earnings declined to $136.1 million, or 20 cents a share, down from $286.2 million, or 42 cents, the same quarter a year ago. Revenues fell to $3.5 billion from $3.8 billion.
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“The marketplace was under increasing pressure throughout 2008, yet we were still able to deliver annual revenues of nearly $14 billion, adjusted operating profits of almost $2.8 billion and free cash flow of just under $1.7 billion–results that reflect the quality of our content and the enduring strength of our operations,” Les Moonves, president and CEO of CBS, said in a statement “As the contraction of the economy accelerated in the fourth quarter, our businesses were affected—in particular our local businesses—but we did not deviate from our ongoing strategy: to create winning content, regardless of the marketplace.”
For the full year, CBS posted a $11.7 billion loss, compared to a $1.2 billion net profit in 2007. Revenues slipped to $14 billion from $14.1 billion.
CBS said operating income from its television businesses fell 40% to $272.2 million in the quarter. Television revenues fell 8% to $2.2 billion.
The company said the drop in revenue was due to lower advertising sales and a restructuring charge of $25.4 million. Entertainment series costs were lower and the company had higher affiliate revenues.
CBS said it is cutting its dividend to maintain financial flexibility in uncertain economic times.
“That’s why we believe this is a prudent action to take while we await improvement in the economy and the credit markets,” Mr. Moonves said. “By taking this step now, we will further strengthen our financial flexibility to meet our debt obligations even in difficult credit markets, and still provide our shareholders with an attractive dividend.”
(Editor: Baumann)

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