CBS posts $12.5 billion loss with write-down
NEW YORK (Reuters) - CBS Corp (CBS.N) reported a massive quarterly loss as the economic crisis and rapidly deteriorating advertising market tarnished the TV and radio broadcaster's results and prompted it to take a $14.1 billion non-cash charge.
CBS, which also owns film and outdoor advertising businesses, posted on Thursday a third-quarter loss of $12.46 billion, or $18.58 per share, compared with a profit of $343.3 million, or 48 cents a share, in the year-earlier period.
Excluding special charges but including stock-based compensation expenses, CBS earned 40 cents per share, which was in line with analysts' expectation, according to Reuters Estimates.
Earlier this month, CBS warned that the declining advertising market would mean it would fall short of the profit it reported for the year-before quarter and lowered its full-year outlook.
At that time, it also told investors it would be taking the $14.1 billion charge, which reflects a write-down of goodwill and other assets that lost value because of the economic turmoil.
CBS on Thursday said revenue rose 3 percent to $3.4 billion, as its recent acquisition of Internet media company CNET offset some of the decline in advertising revenue in its traditional television and radio businesses.
Investors have hammered the company's stock in recent weeks, because of concerns that the economic downturn will sharply undercut profitability of CBS, which is heavily dependent on advertising sales. Shares have dropped more than 40 percent in the last month.
Adding to CBS's woes, Executive Chairman Sumner Redstone recently sold stock in the company to help pay down debt for his privately held National Amusements Inc -- a move that raised questions about the future of CBS.
But since his sales earlier this month, Redstone has rejected any suggestion that he would sell CBS or its stock.
Both Redstone and CBS Chief Executive Les Moonves acknowledged on Thursday the risk that the downturn poses to the media company. Moonves, in a statement, pledged to take steps to "place the company on ever stronger financial footing" while cutting costs.
The advertising downturn comes as CBS is enjoying a better start to the 2008-09 prime-time television season than rivals Fox, owned by News Corp NWSa.N, ABC, owned by Walt Disney (DIS.N), and NBC, majority-owned by General Electric Co (GE.N).
CBS currently leads the ratings race both for overall viewership in prime time and among the young adult audience that advertisers crave.
Over the summer months, however, CBS TV ratings suffered due to competition from NBC's broadcast of the Beijing Olympic Games. Its television advertising suffered too, dropping 14 percent in the third quarter. Overall, the TV division posted a 2 percent rise in revenue for the quarter.
Sticking with recent trends, its radio division was a key weak spot for CBS, with revenue from that business down 12 percent in the third quarter. Outdoor division revenue decreased 1 percent.
Revenue at its Simon & Schuster publishing division rose 5 percent, while revenue at its interactive division jumped to $140.7 million from $35.9 million thanks to CNET.
CBS said adjusted earnings per share, which exclude stock-based compensation expenses and other items, amounted to 43 cents, down from 50 cents in the year-earlier period.
(Reporting by Paul Thomasch, editing by Gerald E. McCormick and Steve Orlofsky)
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