Television revenue, from the CBS network, stations and studio, fell 8% to $2.21 billion despite higher political advertisements and increased affiliate revenue – the fees it gets from cable and satellite companies – for such offerings as the Showtime pay TV channel.
NEW YORK (AP) — CBS Corp. said Wednesday its profits fell 52 percent in the fourth quarter because of weaker advertising sales and the broadcasting company slashed its quarterly dividend more than 80 percent.
CBS estimated it would save about $450 million in the remainder of 2009 by cutting the dividend starting April 1 to 5 cents a share from a previous 27 cents. While the company said it could pay off $1.4 billion in debt maturing in July 2010 with regular cash flows, it said the step will give it greater flexibility.
“When the economy and the credit markets improve, we will revisit the amount of our dividend at that time,” Chief Executive Leslie Moonves told analysts on a conference call.
Shares in CBS jumped 24 cents, or 4.6 percent, to $5.37 in after-hours trading following the announcement. They had dropped 2.3 percent in the regular trading session.
Fitch Ratings said the dividend cut was “credit positive.”
Analyst David Joyce of Miller Tabak & Co. said the cut was larger than expected, but shores up the company’s balance sheet.
“It handles debt maturities for the next two or three years. That’s a positive in not having to worry about it,” Joyce said. He added that the company is not seeing worsening ad sales in the first quarter. “It seems that things have not gotten worse.”
CBS said its net profit in the three months to Dec. 31 was $136 million, or 20 cents per share, compared to a profit of $286 million, or 42 cents per share, in the same quarter a year ago.
Revenue fell 6 percent to $3.53 billion.
Analysts expected earnings of 26 cents per share on revenue of $3.56 billion, according to Thomson Reuters.
Moonves also said CBS should benefit in the latter half of 2009 from the sale of five shows into syndication, including “Everybody Hates Chris” and “Ghost Whisperer,” compared with just one a year ago. Last year, “CSI: NY” was the only show to follow such a path.
In the past, a single “CSI” episode was sold into syndication for $1.9 million, Moonves said, highlighting the profit potential for the sale of multiple seasons of several shows. Revenue from all five shows should be in the hundreds of millions of dollars.
“We believe that the second half of ’09 will be stronger than the first, even if the economy does not improve,” Moonves said.
For the quarter, television revenue from the CBS network, stations and studio, fell 8 percent to $2.21 billion. The figure fell despite higher revenue from political advertisements and increased affiliate revenue — the fees it gets from cable and satellite companies — for such offerings as the Showtime pay TV channel.
Radio revenue plunged 18 percent to $367 million on weaker ad sales and the sale of several stations.
Billboard revenues fell 15 percent to $526 million.
Interactive revenue more than tripled to $186 million, largely because of the acquisition of CNet Networks Inc. for $1.8 billion in June. Revenue would have risen 1 percent if CBS had included CNet’s revenue from the previous period.
Publishing revenue from its Simon & Schuster division rose 1 percent to $245 million.
For all of 2008, the company lost $11.7 billion, or $17.43 per share, compared to net profit of $1.25 billion, or $1.73 per share, in the previous year. Most of the loss in the year was caused by a third-quarter charge of $14.1 billion to write down the value of media assets on CBS’s books.
Revenue at CBS fell 0.9 percent to nearly $14 billion in the year.