CBS First Quarter 2010 Resurgence

Local broadcast a major plus in CBS Q1 resurgence

You couldn’t see CBS Corporation's executives during the company’s 5/5/10 conference call, but you could practically hear the ear-to-ear grins as it announced that Q1 2010 revenues and profits were up, and were pacing up into Q2 and into the future.

President/CEO Leslie Moonves said, “Q1 momentum is continuing into Q2 and beyond.” He noted that CBS is yet another company benefiting from belt tightening. He said three factors have contributed to the successful quarter:

Great success at the network in both regularly scheduled programming and special events;

a remarkable turnaround in local broadcast;

and growth among cable channels.

The $3.53B in Q1 revenues represented a 12% increase over Q1 2009, led by 19% gains Local Broadcast, 15% growth at Entertainment and 8% at Cable Networks.

Even better comps were turned in under the adjusted operating income before depreciation and amortization, or OIBDA, category, which was up 40% to $351.3M.

Local TV revenues were up 29% to $323.7M, and radio revenue was up 9% to 282.7M.

Local broadcast’s combined OIBDA was up 148% to $134M.

Radio in particular was thriving in the top ten markets, where revenues were up 15%.

Moonves also noted that radio pacings in Q2 were running in double digits.

In the end, the company lost four cents per diluted share to $26.2M, compared to an eight cents per diluted share loss in the same quarter in 2009.

Moonves commented, “We got off to a tremendous start in 2010, as our businesses across the Company capitalized on the improving operating environment. Network television is enjoying a robust scatter market, and with CBS in first place, we will be able to monetize what promises to be a very active Upfront. Our strength in primetime also establishes CBS as a leading beneficiary of the dual-revenue-stream broadcast model that continues to emerge, rewarding us not only with strong advertising revenues, but also a growing share of the retransmission consent fees that have now become a fact of the business. In addition, we’re building our other recurring revenue streams, including syndication and premium cable – a business that continues to achieve new financial and creative highs.”

“Meanwhile, the economic recovery has also been a boon to our expanding Interactive platform, and our local TV and radio operations, which are in the midst of a dramatic upswing,” he noted.

“Ad sales and pacing for these businesses have been up sharply so far this year, and we expect political advertising to heat up as the November elections approach.”

Moonves continued, “As importantly, with our lower cost structure throughout the Company, the revenue growth we’re seeing is translating to higher margins. Going forward, we’ll maintain our focus on expenses, and add to the recent steps we’ve taken to strengthen our balance sheet and deliver value to shareholders. As always, we will keep creating and distributing the absolute best content out there. That remains the best strategy for success both today and well into the future.”

CBS Corporation Executive Chairman Sumner Redstone summed it all up. “I could not be more pleased with how CBS performed in the first quarter of this year, and I’m confident that Leslie and his management team will build on this success as the economy continues to recover. We’ve focused on strengthening our already solid financial position, building new efficiencies throughout the Company, and investing in our top-quality content businesses – and I look forward to all that we will do to build on these accomplishments this year and beyond.”