CBS profit drops as TV, radio sales fall

CBS Corp.’s second-quarter earnings fell sharply from a year earlier, when results were boosted by a tax gain and the sale of its Paramount Parks unit.

But the company, which produces “60 Minutes” and “CSI,” delivered adjusted earnings that beat Wall Street expectations, even as revenue fell at both television and radio stations.

Net income plunged to $404 million, or 55 cents a share, from $781.7 million, or $1.02, last year.

The 2006 quarter included a gain of $292 million, or 38 cents a share, from the sale of the theme parks. A tax gain added 17 cents a share to earnings.

Adjusted to exclude one-time items, earnings from businesses operated in both periods rose 9% to $393.1 million, or 54 cents a share, from $360.8 million, or 47 cents, last year.

Analysts, whose estimates typically exclude items, expected a profit of 51 cents a share on revenue of $3.42 billion.

CBS, which was split from Viacom Inc. in January 2006, said revenue fell 3% to $3.37 billion.

At CBS Radio, revenue slumped 11% as the company sold stations in 10 markets since the year-earlier quarter. Still, adjusted to compare revenue at stations owned in both periods, revenue was down 5% on a sharp drop in advertising.

The unit has been caught in an industrywide slump that has seen advertisers sharply reduce spending as listeners shift to commercial-free options such as satellite or Internet radio. In March, the company brought in Dan Mason, a former head of the unit, to turn around the business. It also made headlines that month when it fired radio host Don Imus.

CBS television remained the company’s stalwart unit, despite a 4% decline in revenue to $2.2 billion, caused by the shutdown of the UPN network and a shift of the NCAA men’s basketball championship to the first quarter of this year from the second quarter in 2006. CBS led the broadcast networks in ratings for the spring season and is rated highest for the third consecutive summer, the company said.

In a sign of the shifting media landscape, CBS sold 39 radio stations and 10 television stations in smaller markets over the last year.

Meanwhile, it has acquired digital media properties, most recently spending $280 million to acquire Last.fm, in an effort to distribute its programming content to online viewers. Earlier in the quarter, CBS joined a group of five media companies, including Viacom, to invest $45 million in Joost, a company attempting to broadcast television over the Internet.

The company’s outdoor advertising unit had 4% higher revenue, aided by higher foreign exchange rates and a contract with the London Underground in Britain.

Publishing unit Simon & Schuster delivered a 14% increase in revenue, boosted by bestselling books such as “The Secret” and Stephen King’s “Blaze.”

The company said it expected to finish a share buyback program by the end of August and that a new authorization was under consideration.

Shares of New York-based CBS fell $1.05, or 3.2%, to $31.72.