CBS Corp. Reports Q3 Loss of $12.5 Billion

Amid a worsening advertising market, CBS Corp. Thursday (Oct. 30) reported a third quarter net loss of $12.5 billion. As the company reported earlier this month, it took a $14.1 billion write-down on its businesses.

Revenue for the quarter was up 3 percent to $3.4 billion, driven by the company’s acquisition four months ago of CNET and growth in the syndication business. For the first nine months, CBS revenue is up 1 percent to $10.42 billion.

For the first time, CBS broke out Interactive as a separate reporting segment. Revenue for CBS Interactive, which includes CNET was $141 million in third quarter, up from $35.9 million, a nearly four-fold increase from a year ago. CNET revenue alone was up 6 percent, driven by a 12 percent increase in display advertising.

TV revenue was up 2 percent to $2.08 billion. Growth in the syndication business, (particularly the domestic syndication of CSI: New York), 9 percent subscriber growth at Showtime Networks, and the addition of 4 million subscribers for CBS College Sports Network, offset a network TV revenue decline of 14 percent.

CBS blamed the drop in network TV due to the prime-time preemptions for political conventions, one presidential debate and prime time coverage of Hurricanes Gustav and Ike.

While CBS’ local TV stations are suffering from declines in local advertising, CBS was upbeat about national advertising in network TV and the scatter market. “The scatter market isn’t booming like past years, but we are far out performing our peers,” said Les Moonves, CEO of
CBS, adding that scatter pricing is “hanging in there.”

As for political, CBS is forecasting it will bring in about $180 million, with half of that in fourth quarter.

CBS is also bullish about upcoming retransmission deals with cable companies.
“Retransmission will increasingly play a role as a second revenue stream in our television segment,” Moonves said. “We were encouraged by the recent LIN TV deal with Time Warner Cable.”

The company is taking its time to sell the 50 radio stations it put on the block last quarter. “We’ve received some attractive bids, but current credit conditions make it difficult to predict the timing of transactions,” Moonves said. “We’ll make the best deal possible. We don’t have to sell by any given date.”

Meanwhile, radio revenue was down 12 percent to $393 million with same station revenue down 11 percent.

Outdoor is also feeling the pinch of the economy, down 1 percent to $549.3 million. The North American outdoor business was down 4 percent due decline was due to lost contracts in Toronto and San Francisco, while international outdoor was up 5 percent due to increases in China, France and Holland and strong growth in CBS Outdoor’s new digital displays in the London Underground.