Robust ad market lifts CBS’ first-quarter earnings

CBS Corp. is gliding into this month’s advertising sales season buoyed by a robust market and just a few holes to plug in the broadcast network’s prime-time schedule.

The big question mark is whether CBS’ top-rated comedy, “Two and a Half Men,” returns to anchor the network’s lineup after the high-profile firing of the show’s erratic star, Charlie Sheen. The program’s creator, Chuck Lorre, and Warner Bros. Television have been mulling over concepts to try to keep the series alive.

“We don’t know what the resolution will be,” CBS Chief Executive Leslie Moonves told Wall Street analysts Tuesday during a conference call to discuss the company’s first-quarter earnings. “It’s an important show, but the good news about the CBS schedule is that we are not dependant on any single show on any single night of the week.”

With revenue growth in nearly all its divisions, CBS delivered solid earnings that beat analysts’ expectations. For the period ended March 31, CBS reported earnings of $202 million, or 29 cents a share, compared with a loss of $26 million, or 4 cents, the previous year.


CBS’ revenue of $3.51 billion was about 1% lower than the $3.53 billion it posted in the first quarter of 2010, when the network aired the Super Bowl. Television’s biggest event typically brings in about $200 million in revenue, but because of the huge cost to produce the telecast it does not add to the bottom line.

CBS also benefited by revising its contract for the NCAA basketball finals. The network now shares the tournament with Turner Broadcasting, and CBS no longer loses money on the sport.

Moonves also announced that CBS doubled its quarterly dividend to 10 cents a share.

In two weeks CBS will unveil its fall schedule. Because there are so few clunkers that need to be replaced, the network produced fewer pilots this year. “The bar has been set very high for new programming,” Moonves said.

Moonves repeated his prediction that CBS would garner double-digit rate increases when advertisers place orders for next TV season. The annual springtime sales bazaar is called the “upfront” because the networks sell the bulk of their commercial spots in advance of the season.

Revenue grew at nearly all CBS business units, including local TV stations, radio stations and billboard signs. The New York company’s cable networks, primarily Showtime, and the Simon & Schuster publishing house also increased their revenue.

“CBS’ results are incredibly tied to the advertising market,” said Robin Diedrich, senior media analyst with investment bank Edward Jones. “When there was a downturn, they were among the first to feel it, and now that the market is strong, their revenue is up.”