CBS Profit Rises 40% in 2nd Quarter Despite Its Ratings

NEW YORK — CBS, after one of its worst ratings showings in the key prime-time season, reported a second-quarter profit of $128.7 million, a 40% increase over the same period a year earlier.

The company cited improvement by its broadcast group despite a sluggish advertising market, a rise in interest income and the effects of cost-cutting. For the first time in its history, however, the television network finished third last season, trailing NBC and ABC.

The company said the outlook for the rest of the year remained clouded because of the continuing strike by the Writers Guild of America, which could reduce the amount of new programming available for the fall television season.

At the same time CBS announced the stronger earnings, it announced a management shake-up, with the president of the important broadcast division being pushed aside.

CBS said that Gene Jankowski, 54, was being replaced after 11 years in the post. The new head of the broadcast group, which covers virtually all of the company’s operations, will be Howard Stringer, currently the head of news. Stringer will report directly to CBS President and Chief Executive Laurence A. Tisch, although Jankowski, 54, has been given the title of chairman of the broadcast division. Replacing Stringer as president of CBS News is David Burke, who is now executive vice president at ABC News.

In the year-ago period, CBS posted an after-tax profit of $92.1 million. Revenue rose 4% to $740 million in this year’s period from $714 million.

For the first six months of the year, CBS earned $1.04 billion, up about sevenfold from $140.8 million a year earlier. Revenue was unchanged at $1.44 billion.

The latest six-month results included a one-time gain of $866.6 million from the sale of the CBS magazine and record groups.

Tisch said income from continuing operations and net income were the highest in the company’s history.

“The CBS Broadcast Group scored higher sales in spite of a sluggish advertising market and improved its operating margin, underscoring the effectiveness of ongoing efforts to reduce costs and improve operating efficiencies,” he said.

He said sales and profits rose at the CBS Television network, the CBS television stations and the CBS radio division. The television network benefited from sports programming, which included the championship events of college and professional basketball.

Net corporate interest income climbed to $43.9 million in the quarter from $6.7 million a year earlier, reflecting investment of proceeds from the company’s recent asset sales.

Related Story in Calendar