A Howard-Less CBS Manages to Hold Its Own

CBS Corp. might have lost radio bad boy Howard Stern, but it still has Dr. Frasier Crane and Sheriff Andy Taylor.

On Wednesday, the broadcasting giant reported first-quarter profit rose slightly as a strong performance by the television and billboard advertising divisions was offset by its slumping radio unit.

The numbers mark the first time CBS had released quarterly earnings showing how it is doing as a stand-alone company. Billionaire Sumner Redstone divided his Viacom Inc. media empire in two at the end of last year.

It also marks the first full quarter CBS has been Stern-less. The popular shock jock ended his run on 27 CBS radio stations in December, taking his act to Sirius Satellite Radio Inc.

“We are clearly not yet achieving the level of growth we look for,” said Chief Executive Leslie Moonves. “But these are extremely valuable assets.”

Last week, CBS ousted former Van Halen frontman David Lee Roth, replacing him with the comedy duo “Opie & Anthony” that it had once fired for broadcasting an alleged sexual encounter in New York’s St. Patrick’s Cathedral. Roth, whose show aired in some of Stern’s morning slots, couldn’t catch the ear of listeners.

“The radio portion of CBS is a sticking point for investors, and will remain an issue going forward,” said Frederick Moran, media analyst with Stanford Group Co.

CBS’ quarterly profit nudged up to $226.9 million from $225 million a year earlier, with revenue rising 3.9% to $3.58 billion. CBS Radio’s revenue slid 6% to $434.5 million, while its operating income plummeted 14% to $162.6 million.

Despite the radio problems, CBS still earned 30 cents a share, beating the consensus of analysts polled by Thomson Financial by two cents. A year ago, the comparable group of properties contributed 28 cents a share. CBS shares closed Wednesday down 22 cents, to $25.15.

CBS got a nice boost by tapping into its vast TV library, including selling episodes of “The Andy Griffith Show,” the Aaron Spelling drama “Beverly Hills 90210” and “Frasier.” The company also sold DVD sets of the early TV westerns “Gunsmoke” and “Have Gun Will Travel.”

“Andy Griffith, God bless them, still produced a lot of money,” said CBS Chief Financial Officer Fredric Reynolds, referring to the classic 1960s comedy starring Griffith as small-town lawman Andy Taylor and Ron Howard as son Opie.

CBS’ core television division reported a 3% rise in operating income to $382.8 million on a 5% increase in revenue to $2.5 billion. The CBS network, fueled by such powerhouse shows as “CSI: Crime Scene Investigation” and “Survivor,” reported a 1% revenue increase.

“CBS’ quarter certainly looked solid for the television and outdoor advertising businesses and bottom line earnings,” Moran said. “But the loss of Howard Stern and the ongoing problems in the radio industry showed up to a greater degree than had been expected.”

CBS filed a $218-million suit against Stern in February, claiming that he illegally used CBS airwaves to boost the value of Sirius stock by promoting his show in the waning days of his tenure on its stations. CBS also is exploring the sale of some radio stations.

On a positive note, Moonves noted that CBS’ had been successful in offering some of its programs on the Internet. The company raked in more than $4 million in ad revenue from its webcasts of some NCAA basketball tournament games.

“With over 19 million streams served it was the biggest live sporting event in the history of the Internet,” Moonves said.

Billboards contributed the other bright spot in CBS’ earnings.

Revenue increased 5% to $452 million, reflecting a 10% jump in North American ad sales. Operating income shot up 170% to $45 million. Unlike commercial radio, which has lost listeners to satellite and public radio, traffic congestion has boosted the value of outdoor ads.