CBS results beat forecasts
NEW YORK (Reuters) - CBS Corp (CBS.N) reported stronger-than-expected quarterly results, helped by healthy ad sales and higher profit margins, and doubled its dividend.
Shares of CBS, home to the most-watched U.S. broadcast network with hit shows such as "The Big Bang Theory," rose about 4 percent after hours, extending a rally that has driven the stock up around 35 percent so far this year. Both first-quarter profit and revenue surpassed expectations.
CBS, which also has publishing, outdoor advertising and radio divisions, on Tuesday said advertising revenue was up 12 percent for its broadcast network, when excluding sales related to last year's Super Bowl and NCAA basketball tournament. This year, News Corp's Fox broadcast the Super Bowl and Time Warner Inc's (TWX.N) Turner Broadcasting carried a chunk of the NCAA tournament.
CBS Chairman Sumner Redstone, on a conference call, described it as an "exceptional quarter," a "terrific start to the year," and praised Chief Executive Les Moonves as someone "I rightfully and frequently call a genius."
Moonves was only slightly less spirited, saying he was confident that CBS could keep up its financial strength for the remainder of this year and into 2012.
After a dismal stretch during the recession, corporations are now spending more to promote cellphones, insurance plans, soda and jeans, particularly on TV and in digital media.
And CBS has the hottest television schedule in prime time, with hits such as "Survivor," "The Mentalist" and "CSI" to go along with the "Two and a Half Men," the hugely popular comedy that grabbed headlines when it parted company with actor Charlie Sheen.
Moonves said no decision had yet been made on where to go with "Two and a Half Men," whether it will be brought back in a different format or with another star for the 2011-12 season.
Given the strength of its prime-time schedule and a red-hot advertising market, Moonves predicted rates for TV advertising time in 2011-12 season would be up in the double digits. "We are very encouraged by the ongoing strength of the advertising marketplace," he said on the call.
Earnings came on the same day that CBS made a closely watched announcement regarding personnel, naming "60 Minutes" reporter Scott Pelley the new anchor of CBS Evening News," succeeding Katie Couric.
CBS reported first quarter earnings of $202 million, or 29 cents a share. That compares to a loss of $26 million, or 4 cents a share, in the year-earlier period when it took restructuring and other charges.
Revenue fell slightly to $3.51 billion, down roughly 1 percent from last year's first quarter, due to the absence of the Super Bowl and the deal with Turner to carry part of the NCAA Tournament. The flip side is that CBS's profit margins improved -- since both sports events come with costly rights agreements.
Analysts expected CBS to earn 19 cents a share on revenue of $3.46 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Paul Thomasch; Editing by Steve Orlofsky and Gunna Dickson)