CBS results beat, sees boost from political ads

NEW YORK (Reuters) - CBS Corp, owner of the most-watched, U.S. broadcast TV network, said it does not anticipate a slowdown in advertising sales in the remainder of the year, despite fears that the economy could falter.

CBS expects a surge in political ads ahead of the November U.S. mid-term elections, the media company said on Tuesday, as it reported a higher-than-expected profit and revenue for the second quarter.

"Not only is the second quarter great, but the future looks bright as well," Chief Executive Leslie Moonves said during a call with analysts.

Second-quarter revenue rose 11 percent to $3.33 billion, the second consecutive quarter of growth. Analysts had forecast revenue at $3.24 billion, according to Thomson Reuters

I/B/E/S.

Home to shows like the situation comedy "The Big Bang Theory" and police procedural "CSI: Crime Scene Investigation," CBS said advertising revenue rose 9 percent to $2.2 billion.

"We knew it was going be a good quarter. It was better than what we were anticipating," Alan Gould, an analyst with Evercore Partners, said. Gould has an equal weight rating on

CBS.

Shares of CBS rose 2.5 percent in after-hours trading. The stock, along with peers like Walt Disney Co, News Corp, Viacom Inc and Time Warner Inc, have treaded water in recent weeks after outperforming the broader market earlier this year.

Investors are worried about whether the rebound in advertising can be sustained in 2011.

"The broadcast group seems to be under this terrible cloud regarding the 2011 outlook. Media stocks just can't seem to get any traction," said Benchmark Co analyst Edward Atorino. But he added, "I think the broadcast business is going to be outstanding for the balance of (this) year."

Local broadcasting revenue rose 17 percent to $678.2 million. Entertainment revenues were up 10 percent at $1.67 billion.

CBS had a strong upfront -- the annual spring event when Madison Avenue buys commercial time for the fall TV season -- and is expecting a surge in political ad dollars as several contested congressional seats are up for grabs in November.

While advertising is on the upswing, Moonves has been vocal about reducing the company's exposure to advertising, which represents about 70 percent of total revenue.

On Monday, CBS announced it had signed a 10-year agreement with the No.1 U.S. cable company, Comcast Corp, to carry CBS programing.

CBS expects $200 million to $250 million in retransmission revenue by 2012 and executives reiterated on the call that the deal keeps them on track with that forecast.

Executives declined to disclose the financial aspects but Moonves said the deal is priced for sustained revenue growth.

Moonves also said CBS could streamline some of its small market TV and radio stations within the next six months.

CBS reported adjusted net income of $175.2 million, or 25 cents a share, compared with adjusted net income of $62.6 million, or 9 cents a share, a year ago. Analysts, on average, had forecast 21 cents a share.

Shares of CBS gained 2.5 percent in after-hours trade to $15.39, compared with their close of $15.01 on the New York Stock Exchange.

(Reporting by Jennifer Saba; editing by Andre Grenon, Leslie Gevirtz)