CBS on Wednesday posted sharply higher profits for the first quarter of 1987 as booming record sales and declining interest expenses overcame an unprecedented second straight quarterly loss at its television network.
CBS earnings rose 200% to $48.7 million on revenue of $1.26 billion, up from a profit of $16.3 million on revenue of $1.17 billion for the first quarter of 1986. The company, which has trimmed its payroll in the past year by about 2,000 to 20,000, said the cutbacks were a key factor in offsetting the network's losses.
Also key, the company said, was ad revenue from its broadcast of the National Football League's Super Bowl XXI. Overall, the CBS Broadcast Group's revenue increased 4%.
CBS did not specify how much the television network lost, but Laurence A. Tisch, the company's chief executive, estimated last year that it might lose $20 million in 1987.
The records group, buoyed by strong foreign sales and sales of Bruce Springsteen's latest album, posted a 16% year-to-year increase in revenue to $413 million and a 30% increase in profit to $68 million.
The profit represented an all-time high for the unit, officials said.
Interest expenses declined to $9.3 million in the quarter from $28.2 million in 1986 as the company paid down more of the debt it assumed in its effort to fight off the takeover bid of broadcaster Ted Turner. Also strong in the quarter was the performance of CBS' radio and television stations, the company said.
"Obviously, these profit levels were sustainable only because of the new efficiencies" and staff cutbacks, a spokesman said.
In a statement, Tisch said the company's prospects for the remainder of the year were "uncertain" because of the weakness in CBS' prime-time television ratings and the planned switch to a new ratings measurement technique. In September, the principal ratings services will begin relying on audience viewership data collected by so-called people meters, which are expected to slightly depress the networks' ratings and boost those of non-network television broadcasts.
The effect of the changeover, the fall prime-time season and the advertising economy late in the year are all "big question marks," the spokesman said.
Before the final quarter of 1986, the CBS TV network had not posted a quarterly loss since its start-up in the early 1950s.