CBS TV STATION REVENUE RISES 5.3% IN 3Q

Revenue from the CBS TV stations grew 5.3% year over year in the third quarter on record-breaking political spending, outshining the corporation and the overall TV segment in top-line performance, CBS reported this morning.

Corporate revenue of $3.4 billion and total TV revenue of $2.2 billion was essentially flat compared to the third quarter of 2005. Both numbers were suppressed by some extraordinary losses or reductions, namely the absence of the Emmy Awards broadcast in the quarter, the termination of the UPN network and the outsourcing of home video distribution.

Even though revenue growth was weak, the corporation posted strong year-over-year growth in network earnings from continuing operations (up 26%), earning per share from continuing operations (up 27%), operating income (up 4%), OIBDA (up 3%) and free cash flow (up 65%).

OIBDA for the TV segment was up 9% to $457 million on the flat revenue of $2.2 billion. In addition to the station group, the TV segment includes the CBS network, a half share of The CW network, Showtime and CSTV, the budding sports cable/online network.

“I couldn’t be more pleased,” said CBS Chairman Sumner Redstone during this morning’s conference call with securities analysts.

“Over the past 10 months we have delivered on the promises that CBS had made at the beginning of the year,” he said. “We have driven growth in every important measure—revenue, profits, free cash flow and, of great importance to our shareholders, dividends.

“Think of it,” he said. “Free cash flow up 65%.”

Added CEO Les Moonves: “Overall, there’s no doubt that our core businesses are very healthy and continue to throw off a lot of cash.”

The corporate revenue picture was not brightened by the results of the CBS network, which came up with $30 million less revenue than it did in the third quarter of 2005.

Half of the decrease was due to the absence of the Emmys, said CFO Fred Reynolds on the conference call. The other half, to “softer scatter pricing in July and August” compared to last year.

The big drag on corporation was radio. Still feeling the loss of Howard Stern, the division reported revenue was down 6% in the quarter and OIBDA was down 8.3%.

Reynolds had little more to say about the TV station group, except that pacings in the forth quarter pointed to a 14% year-over-year gain due again to political. He also noted that the 2005 comps are not easy since the station’s group’s flagship WCBS New York benefited from the heavy spending in the New York City mayoral and New Jersey gubernatorial contests last year.

Moonves promised revenue growth for the CBS network in the fourth quarter. “I think there is no question about it.”

Moonves repeated his vow not to use the corporation’s considerable cash reservior on any major acquisitions. Instead, he said, he would return much of it to shareholders through dividends and a stock buyback next year of as much as $1.5 billion.

At the outset of the conference call, Redstone, who fired Tom Freston at Viacom earlier this year, made a point to praise Moonves. “In Les, we have the best executive in the media industry,” he said.