CBS Profit Up Elevenfold in Third Quarter

CBS Corp. said third-quarter profit rose elevenfold on higher audience ratings at its top-ranked U.S. television network and advertising gains at its radio stations and billboard business.

Profit from continuing operations rose to $35 million, or 5 cents a share, from profit from operations of $3 million, or 1 cent, in the year-earlier period.

CBS, which is being acquired by Viacom Inc., was forecast to earn 4 cents a share, the average estimate of seven analysts polled by First Call Corp.

Revenue rose 8.2% to $1.71 billion from $1.58 billion.

Under Chief Executive Mel Karmazin, CBS is benefiting from growth at its Infinity Broadcasting Corp. radio and outdoor-advertising affiliate. Infinity’s revenue rose 16%, lifted by higher sales for radio ads, especially from Internet start-ups. Profit also was boosted by strong ratings at CBS’ network and TV stations, where revenue rose 4.7%, helped by the return of football and TV hits that include “Everybody Loves Raymond.”

“Radio was so strong it almost overshadowed very impressive gains in TV at CBS,” said Bishop Cheen, an analyst at First Union Securities Inc.

Total operating cash flow rose 21% to $406 million, excluding a charge of $68 million in the year-ago period.

CBS defines operating cash flow as earnings before interest, taxes, depreciation and amortization, minority interests and equity losses. Cash flow is used by analysts and investors to measure the performance of broadcasting companies because it focuses on underlying operations and excludes interest payments and noncash charges such as amortization.

On Thursday, CBS shares rose $4.44 to $49.63 on the New York Stock Exchange, as Viacom’s Class B shares surged $3.56 to $45. CBS holders will get 1.085 shares of Viacom for each CBS share, so the two stocks should closely track until the deal is consummated.